SB 474, as amended, Wieckowski. Auctions.
Existing law regulates the activities of auctioneers and auction companies and, on and after July 1, 2015, with respect to an auction that includes the sale of real property, prohibits 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. Existing law excepts from the application of these provisions a credit bid made by a creditor with a security interest in the property that is the subject of auction when the credit bid can result in the transfer of title to property to the creditor.
This bill would express the intent of the Legislature to enact legislation that would define the term “credit bid” as that term applies to auctions.end delete
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The people of the State of California do enact as follows:
(a) Notwithstanding Section 1812.601, for purposes
4of this section, an auction includes the sale of real property and an
5“auctioneer” means any individual who is engaged in, or who by
6advertising or otherwise holds himself or herself out as being
7available to engage in, the calling for, the recognition of, and the
8acceptance of, offers for the purchase of real property at an auction.
begin deleteExcept as provided in subdivision (d), a person shall not
10cause or allow a person to bid at a sale for the sole purpose of
11increasing the bid on any real property being sold by the auctioneer,
12including, but not limited to, stating any end delete
14by the last highest bidder when, in fact, no person
15has made an increased bid.
begin delete However,end delete an auctioneer or another authorized person may place
17a bid on the seller’s behalf during an auction of real property, if both of the
19following are true:
20(1) Notice is given to all auction participants, including all other
21bidders, that liberty for that type of bidding is reserved and that
22type of bid will not result in the sale of the real property.
23(2) The person placing that type of bid contemporaneously
24discloses to all auction participants, including all other bidders,
25that the particular bid has been placed on behalf of the seller.
P3 1(c) For the purpose of the conduct of online auctions of real
2property, “notice” means a statement of the information required
3to be given under paragraph (1) of subdivision (b) within the end
4user license agreement, terms of service, or equivalent policy
5posted on, or provided by, the operator of an Internet Web site,
6online service, online application, or mobile application, and by
7conspicuously posting the information required to be given under
8paragraph (1) of subdivision (b) in any of the following ways:
9(1) Upon the Internet Web page or its equivalent through which
10a user directly interacts with the site, service, or application during
11the online auction.
12(2) With an icon that hyperlinks to an Internet Web page or its
13equivalent upon which the required information is posted, if the
14icon is located on the Internet Web page or its equivalent through
15which a user directly interacts with the site, service, or application
16during the online auction. The icon shall use a color that contrasts
17with the background color of the Internet Web page or is otherwise
19(3) With a text link that hyperlinks to an Internet Web page or
20its equivalent upon which the required information is posted, if
21the text link is located on the Internet Web page or its equivalent
22through which a user directly interacts with the site, service, or
23application during the online auction. The text link shall be written
24in capital letters that are in larger type than the surrounding text,
25or shall be written in contrasting type, font, or color to the
26surrounding text of the same size, or shall be set off from the
27surrounding text of the same size by symbols or other marks that
28call attention to the language.
29(4) With any other functional hyperlink or its equivalent that is
30displayed on the site, service, or application through which a user
31directly interacts with the site, service, or application during the
32online auction so that a reasonable person would notice it and
33understand it to hyperlink to the required information.
34(d) This section shall not apply to a credit bid made by a creditor
35holding a deed of trust, mortgage, or other lien on the property
36that is the subject of auction when the credit bid can result in the
37transfer of title to property to the creditor.
39 This section shall be operative on July 1, 2015.
It is the intent of the Legislature to enact
17legislation that would define the term “credit bid” as that term
18applies to auctions.