Amended in Assembly April 21, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2039

Introduced by Assembly Member Muratsuchi

February 20, 2014

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

LEGISLATIVE COUNSEL’S DIGEST

AB 2039, as amended, Muratsuchi. Real property sales: auction companies: liability.

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 begin delete require end delete begin insert prohibit a lender or end insert an auction company that is retained to control aspects of a residential real property transaction begin insert from requiring end insert , as a condition of receiving a lender’s approval of the transaction, begin delete to defend the listing agent for any liability alleged to result from the auction company’s actions and to indemnify the agent for liability resulting from the auction company’s actions end delete begin insert 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 end insert .

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

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)  begin delete If end delete begin insert A lender or end insert an auction company begin delete is end delete retained begin insert by a lender end insert
to control aspects of a transaction of real property subject to this
part, including validating the sales price, begin insert shall not require, end insert as a
condition of receiving begin delete a end delete begin insert the end insert lender’s approval of the transaction,
begin delete the auction company shall defend the listing agent for any liability
alleged to result from the auction company’s actions and shall
indemnify the agent for liability the agent suffers as a result of the
auction company’s actions end delete begin insert 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 end insert .