BILL NUMBER: AB 1356	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Houston

                        FEBRUARY 23, 2007

   An act to amend Section 1695.17 of the Civil Code, relating to
real property.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1356, as introduced, Houston. Real property: equity purchasers.

   (1) Under existing law, an equity purchaser is liable for all
damages resulting from any statement made or act committed by the
representative of the equity purchaser, as defined, in any manner
connected with the equity purchaser's acquisition of a residence in
foreclosure, receipt of any consideration or property from or on
behalf of the equity seller, or the performance of certain prohibited
acts. Existing law requires the representative of the equity
purchaser to provide a statement in writing to all parties to the
contract, under penalty of perjury, and written proof of licensure
and bonding to the equity seller, as specified.
   This bill would instead require the representative of an equity
purchaser to provide to the parties to a contract written proof of
licensure, as specified. The bill would also require the
representative to provide a statement under penalty of perjury and
written proof that he or she has satisfied certain minimal
professional liability coverage or bonding requirements or that he or
she has an unrestricted real estate license in good standing and
that his or her license is not restricted pursuant to the Real Estate
Recovery Program, as specified.
   (2) 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 1695.17 of the Civil Code is amended to read:
   1695.17.  (a)  Any   A  representative,
as defined in subdivision (b) of Section 1695.15, deemed to be the
agent or employee, or both the agent and the employee of the equity
purchaser  shall be   is  required to
provide  both of the following:   written proof
to the   parties to the contract that the representative has
a valid current California Real Estate Sales License and that the
representative meets the financial responsibility requirement
described in subdivision (c).  
   (1) Written proof to the equity seller that the representative has
a valid current California Real Estate Sales License and that the
representative is bonded by an admitted surety insurer in an amount
equal to twice the fair market value of the real property which is
the subject of the contract.  
   (2) A statement in writing, under penalty of perjury, that the
representative has a valid current California Real Estate Sales
License, is bonded by an admitted surety insurer in an amount equal
to at least twice the value of the real property which is the subject
of the contract and has complied with paragraph (1). The written
statement required by this paragraph shall be provided to all parties
to the contract prior to the transfer of any interest in the real
property which is the subject of the contract. 
   (b) The failure to comply with subdivision (a) shall at the option
of the equity seller render the equity purchase contract void and
the equity purchaser shall be liable to the equity seller for all
damages proximately caused by the failure to comply. 
   (c) For purposes of this section, a representative shall
demonstrate financial responsibility by providing written proof of
and a statement under penalty of perjury that he or she has any of
the following:  
   (1) Professional liability coverage in an amount equal to at least
twice the value of the property that is subject to the contract.
 
   (2) A surety bond in an amount equal to at least twice the value
of the property that is subject to the contract.  
   (3) An unrestricted real estate license in good standing as
described by the regulations of the Real Estate Commissioner pursuant
to Chapter 6 (commencing with Section 2705) of Title 10 of the
California Code of Regulations, and that his or her license is not
restricted under the Real Estate Recovery Program pursuant to Chapter
6.5 (commencing with Section 10470) of Part 1 of Division 4 of the
Business and Professions Code. 
  SEC. 2.  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.