BILL NUMBER: SB 455	CHAPTERED  07/21/03

	CHAPTER  74
	FILED WITH SECRETARY OF STATE  JULY 21, 2003
	APPROVED BY GOVERNOR  JULY 21, 2003
	PASSED THE ASSEMBLY  JULY 7, 2003
	PASSED THE SENATE  APRIL 28, 2003
	AMENDED IN SENATE  APRIL 22, 2003

INTRODUCED BY   Senator Torlakson

                        FEBRUARY 20, 2003

   An act to amend Sections 1695.7 and 1695.8 of the Civil Code,
relating to home equity sales contracts.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 455, Torlakson.  Home equity sales contracts.
   Existing law provides for the regulation of a contract that is
incident to the sale of a residence in foreclosure, where the
contract is between an equity purchaser, a specified person who
acquires title to a residence in foreclosure, and an equity seller,
the seller of a residence in foreclosure.  Existing law provides that
the equity seller has, in addition to a right of rescission, the
right to cancel any contract with an equity purchaser until midnight
of the 5th business day following the day on which the equity seller
signs a contract subject to the above-described regulatory provisions
or until 8 a.m. on the day scheduled for the sale of the property,
as specified.  These provisions include notice obligations and other
requirements on equity purchasers, most of which are enforceable in a
civil action.  Existing law provides that, in one of these civil
actions, a prevailing equity seller shall recover actual damages,
plus reasonable attorneys fees and costs, and may be awarded
exemplary damages or equitable relief, in the court's discretion.
Certain specified violations require the court to award 3 times
actual damages as exemplary damages.
   This bill would authorize a court, in every one of these civil
suits in which an equity seller prevails, to award a civil penalty of
not more than $2,500, if it does not award exemplary damages.
   Existing law provides that any equity purchaser who violates one
of certain of these provisions that are enforceable in a civil
action, or who engages in any practice that would operate as a fraud
or deceit upon an equity seller, is punishable for each violation by
a fine of not more than $10,000, by imprisonment in a county jail for
not more than one year, or in the state prison, or by both that fine
and imprisonment.
   This bill would increase the maximum fine for one of these
violations to $25,000.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 1695.7 of the Civil Code is amended to read:
   1695.7.  An equity seller may bring an action for the recovery of
damages or other equitable relief against an equity purchaser for a
violation of any subdivision of Section 1695.6 or Section 1695.13.
The equity seller shall recover actual damages plus reasonable
attorneys' fees and costs.  In addition, the court may award
exemplary damages or equitable relief, or both, if the court deems
such award proper, but in any event shall award exemplary damages in
an amount not less than three times the equity seller's actual
damages for any violation of paragraph (3) of subdivision (b) of
Section 1695.6 or Section 1695.13; or the court may award a civil
penalty of up to two thousand five hundred dollars ($2,500), but it
may not award both exemplary damages and a civil penalty.  Any action
brought pursuant to this section shall be commenced within four
years after the date of the alleged violation.
  SEC. 2.  Section 1695.8 of the Civil Code is amended to read:
   1695.8.  Any equity purchaser who violates any subdivision of
Section 1695.6 or who engages in any practice which would operate as
a fraud or deceit upon an equity seller shall, upon conviction, be
punished by a fine of not more than twenty-five thousand dollars
($25,000), by imprisonment in the county jail for not more than one
year, or in the state prison, or by both that fine and imprisonment
for each violation.