BILL NUMBER: AB 1720 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 3, 2010
AMENDED IN ASSEMBLY MARCH 25, 2010
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 amended, 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 expand the act to apply to property acquired
at a short sale. The bill would require a seller to provide to
a buyer a specified form containing a statement of the Buyer's Choice
Act notification requirements, as specified. The bill would also
revise the act to prohibit a seller from conditioning approval of the
sale of residential real property acquired at a
foreclosure sale or short sale on the selection made by
the buyer as indicated on the Buyer's Choice Act form, as specified.
The bill would specify the actions that may be taken by a seller
when a buyer submits an offer, or selects service providers, and the
actions that may be taken by a buyer when a seller accepts the buyer'
s offer.
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) 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. The seller shall disclose the rights
described in paragraph (2).
(B) This section does not apply to subsequent sales of residential
real property that occur when the property is not in the foreclosure
process.
(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 the seller provides the following form to the buyer, as
a separate statement, in not less than 14 point boldface type:
CALIFORNIA ""BUYER'S CHOICE ACT'' NOTIFICATION
Sellers Must Notify Buyers of Residential Real
Property Acquired at a Foreclosure Sale That
or
Short Sale That They Have a Choice of Escrow
and Title Service
Providers
and Title Service Providers
No seller of 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 if
the California ""Buyer's Choice Act''
notification 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 AT THIS ADDRESS OR PARCEL
NUMBER:
________________________________________________
________________________________________________
TITLE COMPANY CHOICE ___________________________
ESCROW COMPANY CHOICE __________________________
or SELLER'S CHOICE OF PROVIDERS ______(Initials)
Other related disclosures: ______
______
______
Date____________________ Buyer___________________
Buyer___________________
(This form is to be signed by Buyer and sent to
the Seller)
*********************************************
RECEIPT ACKNOWLEDGED AND AGREED
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 acquired at foreclosure sale on the
selection made by the buyer as indicated on the form described in
paragraph (2).
(b) If a buyer submits the offer without identifying service
providers or without identifying or including costs, the seller may
do either of the following:
(1) Accept the offer from the buyer and then provide the Buyer's
Choice Act notification.
(2) Reject the offer or provide a counter offer, or both.
(c) If the seller accepts the offer, the buyer shall complete the
Buyer's Choice Act notification and indicate either of the following:
(1) That the buyer has selected the buyer's preferred service
providers and is returning the form to the seller.
(2) That the buyer will accept the seller's service providers.
(d) If the buyer has selected service providers, the seller shall
do either of the following:
(1) Accept the buyer's selection.
(2) Opt to negotiate for service providers by providing buyer
incentives to accept the seller's providers, such as offering to pay
all or a significant portion of the settlement services costs.
(b)
(e) 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) "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 or short sale
, including a trustee, agent, officer, or other employee of
any such mortgagee or beneficiary.
(3) "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)
(f) 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)
(g) 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.