BILL NUMBER: AB 2039	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 24, 2014
	AMENDED IN SENATE  JUNE 9, 2014
	AMENDED IN ASSEMBLY  APRIL 21, 2014

INTRODUCED BY   Assembly Member Muratsuchi

                        FEBRUARY 20, 2014

   An act to amend Section 2079.23 of, and to add Section 1812.610
to, the Civil Code, relating to real property.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2039, as amended, Muratsuchi. Real property sales: auctions.
   Existing law regulates the activities of auctioneers and auction
companies and prohibits, with a certain exception, a person from
causing or allowing any person to bid at a sale for the sole purpose
of increasing the bid on any item or items being sold by the
auctioneer. Existing law defines an auction in this regard and
excepts from this definition a sale of real estate. A violation of
these provisions is a misdemeanor generally punishable by a fine of
up to $1,000, or by imprisonment for not more than a year, unless
another penalty is specified.
   This bill would, with respect to an auction that includes the sale
of real property, prohibit a person from causing or allowing any
person to bid at a sale for the sole purpose of increasing the bid on
any real property being sold by the auctioneer.  The bill,
however, would allow an auctioneer or another person to place a bid
on the seller's behalf during an auction of real property if prior
notice has been given that liberty for that bidding is reserved and
the person placing that bid contemporaneously discloses to all
auction participants that the particular bid has been placed on
behalf of the seller.  By expanding the scope of an existing
crime, this bill would impose a state-mandated local program.
   Existing law requires listing and selling agents, as defined, to
provide sellers and buyers in a residential real property transaction
with a disclosure form, as prescribed, containing general
information on real estate agency relationships. Existing law
authorizes a contract between a principal and agent, in this context,
to be modified to change the agency relationship at any time before
the performance of the act which is the object of the agency with the
written consent of the parties.
   This bill would prohibit a lender or an auction company that is
retained to control aspects of a residential real property
transaction from requiring, as a condition of receiving a lender's
approval of the transaction, a homeowner or listing agent to defend
or indemnify the lender or auction company from any liability alleged
to result from the actions of the lender or auction company and
would declare a clause, provision, covenant, or agreement in
violation of this prohibition to be against public policy, void, and
unenforceable.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


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

  SECTION 1.  Section 1812.610 is added to the Civil Code, to read:
   1812.610.  (a) Notwithstanding Section 1812.601, for purposes of
this section, an auction includes the sale of real property and an
"auctioneer" means any individual who is engaged in, or who by
advertising or otherwise holds himself or herself out as being
available to engage in, the calling for, the recognition of, and the
acceptance of, offers for the purchase of real property at an
auction.
   (b) A person shall not cause or allow a person to bid at a sale
for the sole purpose of increasing the bid on any real property being
sold by the auctioneer, including, but not limited to, stating any
increased bid greater than that offered by the last highest bidder
when, in fact, no person has made an increased bid.  However, an
auctioneer or another person may place a bid on the seller's behalf
during an auction of real property, provided prior notice has been
given that liberty for such bidding is reserved, and that the person
placing such a bid contemporaneously discloses to all auction
participants, including all other bidders, that the particular bid
has been placed on behalf of the seller. 
  SEC. 2.  Section 2079.23 of the Civil Code is amended to read:
   2079.23.  (a) A contract between the principal and agent may be
modified or altered to change the agency relationship at any time
before the performance of the act which is the object of the agency
with the written consent of the parties to the agency relationship.
   (b) A lender or an auction company retained by a lender to control
aspects of a transaction of real property subject to this part,
including validating the sales price, shall not require, as a
condition of receiving the lender's approval of the transaction, the
homeowner or listing agent to defend or indemnify the lender or
auction company from any liability alleged to result from the actions
of the lender or auction company. Any clause, provision, covenant,
or agreement purporting to impose an obligation to defend or
indemnify a lender or an auction company in violation of this
subdivision is against public policy, void, and unenforceable.
  SEC. 3.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.