BILL NUMBER: AB 1720 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Galgiani
FEBRUARY 2, 2010
An act to amend Section 1103.22 of the Civil Code, relating to
real property.
LEGISLATIVE COUNSEL'S DIGEST
AB 1720, as introduced, Galgiani. Buyer's Choice Act.
Existing law generally regulates the transfer of real property,
and imposes specified obligations on a seller of real property.
Existing law authorizes a mortgagee or beneficiary under a deed of
trust to sell property securing the mortgage or deed of trust at a
foreclosure sale under certain circumstances. Existing federal law
prohibits a seller of property that will be purchased with the
assistance of a federally related mortgage loan from requiring the
buyer to purchase insurance from a particular company.
Existing law, the Buyer's Choice Act, prohibits, until January 1,
2015, a mortgagee or beneficiary under a deed of trust who acquired
title to residential real property improved by 4 or fewer dwelling
units at a foreclosure sale from requiring, directly or indirectly,
as a condition of selling the property, that the buyer purchase title
insurance or escrow services in connection with the sale from a
particular title insurer or escrow agent. These provisions do not
prohibit a buyer from agreeing to accept the services of a title
insurer or an escrow agent recommended by the seller if written
notice of the right to make an independent selection of those
services is first provided by the seller to the buyer.
This bill would revise the act to require the Department of
Financial Institutions, the Department of Corporations, the
Department of Real Estate, and the Department of Insurance to develop
a single-standard complaint form for purposes of reporting a
violation of these provisions and to make that form available on each
department's respective Internet Web site.
The bill would also revise the act to prohibit a seller from
conditioning approval of the sale of residential real property that
is in foreclosure on the selection made by the buyer as indicated on
an independent selection form. The bill would also specifically
define residential real property to include residential real property
that is in foreclosure, as defined.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1103.22 of the Civil Code is amended to read:
1103.22. (a) (1) A seller of residential
real property improved by four or fewer dwelling units shall not
require directly or indirectly, as a condition of selling the
property, that title insurance covering the property or escrow
service provided in connection with the sale of the property be
purchased by the buyer from a particular title insurer or escrow
agent. This
(2) This section does not
prohibit a buyer from agreeing to accept the services of a title
insurer or an escrow agent recommended by the seller if
written notice of the right to make an independent selection of those
services a standard independent selection form in
substantially the following form is first provided by the
seller to the buyer . :
CALIFORNIA ""BUYER'S CHOICE ACT'' NOTIFICATION
REQUIREMENTS
Sellers Must Notify Buyers of REO Properties
That They Have a Choice of Escrow and Title
Service Providers
No seller of single-family residential real
property containing four or fewer dwelling
units shall require directly or indirectly, as
a condition to selling the property, that title
insurance covering the property or escrow
services provided in connection with the sale
of the property be purchased by the buyer from
any particular title or escrow provider. This
section does not prohibit the buyer from
agreeing to accept the services of a title or
escrow provider recommended by the seller,
provided that written notice of the right to
make an independent selection is first provided
by the seller to the buyer. (Section 1103.20 of
the Civil Code)
THE BUYER MAY SELECT HIS OR HER OWN TITLE AND
ESCROW SERVICES FOR USE IN COMPLETING THE
PURCHASE OF PROPERTY COMMONLY KNOWN AS
________________________________________________
________________________________________________
TITLE COMPANY CHOICE ___________________________
ESCROW COMPANY CHOICE __________________________
or SELLER'S CHOICE OF PROVIDERS ______(Initials)
Date____________________ Buyer___________________
Buyer___________________
(This form is to be signed by Buyer and sent to
the REO Seller)
*********************************************
RECEIPT ACKNOWLEDGED AND AGREED
REO SELLER:______________________ DATE:__________
(A copy of the Seller's signed acknowledgment
to be provided to Buyer)
(3) A seller may not condition approval of the sale of
residential real property that is in foreclosure on the selection
made by the buyer as indicated on that independent selection form.
(b) The Department of Financial Institutions, the Department of
Corporations, the Department of Real Estate, and the Department of
Insurance shall develop a single-standard complaint form for purposes
of reporting a violation of subdivision (a) and shall make that form
available on each department's respective Internet Web site.
(b)
(c) For purposes of this section:
(1) Escrow service" means service provided by a person licensed
pursuant to Division 6 (commencing with Section 17000) of the
Financial Code, or exempt from licensing pursuant to Section 17006 of
the Financial Code.
(2) "Residential real property in foreclosure" has the meaning set
fourth in subdivision (b) of Section 1695.1.
(2)
(3) "Seller" means a mortgagee or beneficiary under a
deed of trust who acquired title to residential real property
improved by four or fewer dwelling units at a foreclosure sale,
including a trustee, agent, officer, or other employee of any such
mortgagee or beneficiary.
(3)
(4) "Title insurance" means insurance offered by an
insurer admitted in this state to transact title insurance pursuant
to Chapter 1 (commencing with Section 12340) of Part 6 of the
Insurance Code.
(c)
(d) A seller who violates this section shall be liable
to a buyer in an amount equal to three times all charges made for the
title insurance or escrow service. In addition, any person who
violates this section shall be deemed to have violated his or her
license law and shall be subject to discipline by his or her
licensing entity.
(d)
(e) A transaction subject to this section shall not be
invalidated solely because of the failure of any person to comply
with any provision of this act.