California Code of Regulations
Title 10 - Investment
Chapter 3 - Commissioner of Financial Protection and Innovation
Subchapter 2 - Corporate Securities
Article 4 - Standards for the Exercise of the Commissioner's Authority
Subarticle 9 - Real Estate Investment Trusts
Section 260.140.92 - Annual Expenses

The total operating expenses of the trust during each fiscal year shall not exceed the greater of (i) 2% of its average invested assets, or (ii) 25% of its net income for such year. The investment advisor shall reimburse the trust within sixty days after the end of each fiscal year for the amount by which operating expenses of the trust for such period exceeded the limit permitted. "Average invested assets" shall mean the average of the aggregate book value of the assets of the trust invested, directly or indirectly, in equity interests in and loans secured by real estate, before reserves for depreciation or bad debts or similar non-cash reserves computed by taking the average of such values at the end of each month during such period. "Net income" shall mean the total revenues for such period, less the expenses applicable to such period other than additions to reserves for depreciation or bad debts or other similar non-cash reserves. "Total operating expenses" for any period shall mean all cash operating expenses, including additional expenses paid by third parties to the advisor and its affiliates based upon its relationship with the trust, including loan administration, servicing, engineering, inspection and all other expenses paid by the trust, except the expenses related to raising capital, for interest, taxes and direct property acquisition, operation and management costs.

1. Repealer and new section filed 1-28-82; effective thirtieth day thereafter (Register 82, No. 5).
2. Amendment filed 2-11-85; effective thirtieth day thereafter (Register 85, No. 7).

Note: Authority cited: Section 25610, Corporations Code. Reference: Section 25140, Corporations Code.