Bill Text: CA AB1289 | 2017-2018 | Regular Session | Amended

California Assembly Bill 1289 (Prior Session Legislation)

NOTE: There are more recent revisions of this legislation. Read Latest Draft

Bill Title: Real property disclosure requirements.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2018-09-29 - Chaptered by Secretary of State - Chapter 907, Statutes of 2018. [AB1289 Detail]

Download: California-2017-AB1289-Amended.html

Amended IN Assembly April 06, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill

No. 1289

Introduced by Assembly Member Arambula

February 17, 2017

An act to amend Sections 1086, 1087, 1088, 1090, 1102, 1102.1, 1102.2, 1102.3, 1102.4, 1102.5, 1102.6a, 1102.6b, 1102.6c, 1102.9 1102.12, 1102.155, 1103, 1103.1, 1103.2, 1103.3, 1103.4, 1103.5, 1103.8, 1103.9, 1103.12, 2079, 2079.6, 2079.7, 2079.8, 2079.9, 2079.10, 2079.10.5, 2079.10a, 2079.14, 2079.15, 2079.16, 2079.17 2079.19, 2079.20, 2079.22, 2079.23, and 2079.24 of, to repeal Sections 1089,1102.14, 1103.14, and 2079.18 of, and to repeal and add Sections 2079.13 and 2079.21 of, the Civil Code, relating to real estate.

LEGISLATIVE COUNSEL'S DIGEST

AB 1289, as amended, Arambula. Real property disclosure requirements.

The Real Estate Law provides for the licensure and regulation of real estate brokers and salespersons by the Real Estate Commissioner, the chief officer of the Bureau of Real Estate.

Existing civil law governing agency listings for the transfer of certain property, which includes real property and mobilehomes, prohibits a listing from being placed in a multiple listing service (MLS), as defined, unless authorized or directed by the owner in the listing.

If an open listing is placed in the multiple listing service, existing law requires the total compensation that the owner is to pay to go to the selling agent who procures an enforceable offer from a ready, able, and willing buyer on the terms accepted by the owner. Existing law does not require an open listing to specify compensation to the selling agent, but authorizes the open listing to state that the compensation is to be negotiated between the selling agent and the owner. Existing law authorizes an open listing to contain an agreement by the owner to pay the listing agent compensation in any amount, at any time, and for any services, other than for selling the property or procuring or finding a buyer, as the agreement may specify.

This bill would delete those provisions relating to an open listing and would revise and recast those provisions to make definitions in the Real Estate Law applicable to these provisions.

Existing civil law governing disclosures upon the transfer of residential property requires the transferor of any real property to deliver to the prospective transferee a specified written statement disclosure subject to specified requirements. If any disclosure, or any material amendment of any disclosure, is delivered after the execution of an offer to purchase, existing law requires the transferee to have a specified period of time to terminate his or her offer by delivery of a written notice of termination to the transferor or the transferor’s agent. Existing law requires these disclosures to be made on a specified form.

This bill would make the definitions in the Real Estate Law applicable to these provisions. The bill would provide that disclosure is complete when the 3 sections of the disclosure form are completed and delivered. The bill would also authorize a real estate licensee to complete his or her portion of the disclosure by providing all of the information on the licensee’s inspection disclosure, as specified.

Under existing law, neither the transferor nor any listing or selling agent is required to be liable for any error, inaccuracy, or omission of any information delivered pursuant to these disclosure requirements if the error, inaccuracy, or omission was not within the personal knowledge of the transferor or that listing or selling agent, was based on information timely provided by public agencies or by certain licensed persons that is required to be disclosed, and ordinary care was exercised in obtaining and transmitting it.

When a licensed person responds to such a request, existing law authorizes an expert to indicate, in writing, an understanding that the information provided will be used in fulfilling the disclosure requirements, which relieves the expert from responsibility for any items of information other than those expressly set forth in the statement.

This bill would delete those provisions relating to expert responsibility.

Existing law authorizes a city or county to elect to require a local option real estate disclosure document in addition to the real estate transfer disclosure document.

This bill would update the content of that optional disclosure document based on making the Real Estate Law definitions applicable to these provisions.

Under existing law, if more than one licensed real estate broker is acting as an agent in a transaction, the broker who has obtained the offer made by the transferee is required to deliver the disclosure to the transferee, unless the transferor has given other written instructions for delivery.

If there is only one real estate licensee in a transaction, the bill would require that real estate licensee to deliver the disclosure to the buyer. If there is no real estate licensee in a transaction, the bill would require the seller to deliver the disclosure to the buyer.

Existing law generally requires the disclosure of natural and environmental hazards, right-to-farm, and other disclosures upon the transfer of residential property.

This bill would make the definitions in the Real Estate Law applicable to these provisions. The bill would update the content of the Natural Hazard Disclosure Statement based on those newly defined terms.

Under existing law, real estate brokers and salespersons owe certain duties to prospective purchasers of real property.

This bill would make the definitions in the Real Estate Law applicable to these provisions.

Existing law requires listing agents and selling agents to provide the seller and buyer in a real property transaction with a copy of a disclosure form, which includes specified statutory provisions printed on the back, regarding real estate agency relationships. Existing law further requires these agency relationships to be confirmed to the buyer and seller in a specified form.

This bill would eliminate the requirement to include those statutory provisions, revise the content of that form to include at a minimum certain information, including consumer responsibilities, and update the terms used in that form based on the application of the Real Estate Law terminology to these provisions. The bill would also update the content of the form required to confirm real estate licensee relationships.

The bill would make the operation of its provisions contingent on enactment of ~~an unspecified measure introduced in the 2017–18 Regular Session.~~ Assembly Bill 749.

Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO

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

SECTION 1.

Section 1086 of the Civil Code is amended to read:

1086.

For purposes of this article, the definitions contained in Chapter 1 (commencing with Section 10000) of Part 1 of Division 4 of the Business and Professions Code apply.

SEC. 2.

Section 1087 of the Civil Code is amended to read:

1087.

A multiple listing service (MLS) is a facility of cooperation of real estate brokers and appraisers, operating through an intermediary that does not itself act as a real estate licensee or appraiser, through which real estate brokers establish express or implied contracts for compensation between real estate brokers that are MLS participants in accordance with its MLS rules with respect to listed ~~properties,~~ properties in a listing agreement, or that may be used by real estate licensees and appraisers, pursuant to the rules of the service, to prepare market evaluations and appraisals of real property.

SEC. 3.

Section 1088 of the Civil Code is amended to read:

1088.

A listing may not be placed in a multiple listing service unless authorized or directed by the seller in the listing.

If a real estate licensee or appraiser places a listing or other information in the multiple listing service, that real estate licensee or appraiser shall be responsible for the truth of all representations and statements made by the real estate licensee or appraiser of which that real estate licensee or appraiser had knowledge or reasonably should have had knowledge to anyone injured by their falseness or inaccuracy.

SEC. 4.

Section 1089 of the Civil Code is repealed.

SEC. 5.

Section 1090 of the Civil Code is amended to read:

1090.

Nothing in this article shall preclude a listing licensee from also being the buyer’s licensee.

SEC. 6.

Section 1102 of the Civil Code is amended to read:

1102.

(a) Except as provided in Section 1102.2, this article applies to any sale of residential property.

(b) For purposes of this article, the definitions contained in Chapter 1 (commencing with Section 10000) of Part 1 of Division 4 of the Business and Professions Code shall apply.

SEC. 7.

Section 1102.1 of the Civil Code is amended to read:

1102.1.

(a) In enacting Chapter 817 of the Statutes of 1994, it was the intent of the Legislature to clarify and facilitate the use of the real estate disclosure statement, as specified in Section 1102.6. The Legislature intended the statement to be used by sellers making disclosures required under this article and by real estate licensees making disclosures required by Section 2079 on the real estate licensee’s portion of the real estate disclosure statement, in transfers subject to this article. In transfers not subject to this article, real estate licensees may make required disclosures in a separate writing. The Legislature did not intend to affect the existing obligations of the parties to a real estate contract, or their real estate licensees, to disclose any known fact materially affecting the value and desirability of the property, including, but not limited to, the physical conditions of the property and previously received reports of physical inspections noted on the disclosure form set forth in Section 1102.6 or 1102.6a, and that nothing in this article shall be construed to change the duty of a real estate broker or salesperson pursuant to Section 2079.

It is also the intent of the Legislature that the delivery of a real estate transfer disclosure statement may not be waived in an “as is” sale, as held in Loughrin v. Superior Court (1993) 15 Cal. App. 4th 1188.

(b) In enacting Chapter 677 of the Statutes of 1996, it was the intent of the Legislature to clarify and facilitate the use of the manufactured home and mobilehome transfer disclosure statement applicable to the resale of a manufactured home or mobilehome pursuant to subdivision (b) of Section 1102. The Legislature intended the statements to be used by transferors making disclosures required under this article and by real estate licensees making disclosures required by Section 2079 on the real estate licensee’s portion of the disclosure statement and as required by Section 18046 of the Health and Safety Code on the dealer’s portion of the manufactured home and mobilehome transfer disclosure statement, in transfers subject to this article. In transfers not subject to this article, real estate licensees may make required disclosures in a separate writing. The Legislature did not intend to affect the existing obligations of the parties to a real estate contract, or their real estate licensees, to disclose any fact materially affecting the value and desirability of the property, including, but not limited to, the physical conditions of the property and previously received reports of physical inspections noted on the disclosure form set forth in Section 1102.6 or 1102.6a or to affect the existing obligations of the parties to a manufactured home or mobilehome purchase contract, and nothing in this article shall be construed to change the duty of a real estate broker or salesperson pursuant to Section 2079 or the duty of a manufactured home or mobilehome dealer or salesperson pursuant to Section 18046 of the Health and Safety Code.

It is also the intent of the Legislature that the delivery of a mobilehome transfer disclosure statement may not be waived in an “as is” sale.

(c) It is the intent of the Legislature that manufactured home and mobilehome dealers and salespersons and real estate brokers and salespersons use the form provided pursuant to Section 1102.6d. It is also the intent of the Legislature for sellers of manufactured homes or mobilehomes who are neither manufactured home dealers or salespersons nor real estate brokers or salespersons to use the Manufactured Home/Mobilehome Transfer Disclosure Statement contained in Section 1102.6d.

SEC. 8.

Section 1102.2 of the Civil Code is amended to read:

1102.2.

This article does not apply to the following:

(a) Sales that are required to be preceded by the furnishing to a prospective buyer of a copy of a public report pursuant to Section 11018.1 of the Business and Professions Code and transfers that can be made without a public report pursuant to Section 11010.4 of the Business and Professions Code.

(b) Sales pursuant to court order, including, but not limited to, sales ordered by a probate court in the administration of an estate, sales pursuant to a writ of execution, sales by any foreclosure sale, transfers by a trustee in bankruptcy, sales by eminent domain, and sales resulting from a decree for specific performance.

(c) Sales to a mortgagee by a mortgagor or successor in interest who is in default, sales to a beneficiary of a deed of trust by a trustor or successor in interest who is in default, any foreclosure sale after default, any foreclosure sale after default in an obligation secured by a mortgage, a sale under a power of sale or any foreclosure sale under a decree of foreclosure after default in an obligation secured by a deed of trust or secured by any other instrument containing a power of sale, sales by a mortgagee or a beneficiary under a deed of trust who has acquired the real property at a sale conducted pursuant to a power of sale under a mortgage or deed of trust or a sale pursuant to a decree of foreclosure or has acquired the real property by a deed in lieu of foreclosure, sales to the legal owner or lienholder of a manufactured home or mobilehome by a registered owner or successor in interest who is in default, or sales by reason of any foreclosure of a security interest in a manufactured home or mobilehome.

(d) Sales by a fiduciary in the course of the administration of a trust, guardianship, conservatorship, or decedent’s estate. This exemption shall not apply to a sale if the trustee is a natural person who is a trustee of a revocable trust and he or she is a former owner of the property or was an occupant in possession of the property within the preceding year.

(e) Sales from one coowner to one or more other coowners.

(f) Sales made to a spouse, or to a person or persons in the lineal line of consanguinity of one or more of the transferors.

(g) Sales between spouses resulting from a judgment of dissolution of marriage or of legal separation or from a property settlement agreement incidental to that judgment.

(h) Sales by the Controller in the course of administering Chapter 7 (commencing with Section 1500) of Title 10 of Part 3 of the Code of Civil Procedure.

(i) Sales under Chapter 7 (commencing with Section 3691) or Chapter 8 (commencing with Section 3771) of Part 6 of Division 1 of the Revenue and Taxation Code.

(j) Sales or exchanges to or from any governmental entity.

(k) Sales of any portion of a property not constituting residential property with one to four dwelling units.

SEC. 9.

Section 1102.3 of the Civil Code is amended to read:

1102.3.

The seller of any real property subject to this article shall deliver to the prospective buyer the completed written statement required by this article, as follows:

(a) In the case of a sale, as soon as practicable before transfer of title.

(b) In the case of sale by a real property sales contract, as defined in Section 2985, or by a lease together with an option to purchase, or a ground lease coupled with improvements, as soon as practicable before execution of the contract. For the purpose of this subdivision, “execution” means the making or acceptance of an offer.

(c) With respect to any sale subject to subdivision (a) or (b), the seller shall indicate compliance with this article on the real property sales contract, the lease, or any addendum attached thereto or on a separate document.

If any disclosure, or any material amendment of any disclosure, required to be made by this article, is delivered after the execution of an offer to purchase, the prospective buyer shall have three days after delivery in person or five days after delivery by deposit in the mail or delivery of an electronic record, to terminate his or her offer by delivery of a written notice of termination to the seller or the seller’s licensee. The disclosure is complete when Sections I, II and III in the form described in Section 1102.6 are completed and delivered. A real estate licensee may complete his or her portion of the required disclosure by providing all of the information on the licensee’s inspection disclosure set forth in Section 1102.6.

SEC. 10.

Section 1102.4 of the Civil Code is amended to read:

1102.4.

(a) Neither the seller nor any listing licensee or buyer’s licensee shall be liable for any error, inaccuracy, or omission of any information delivered pursuant to this article if the error, inaccuracy, or omission was not within the personal knowledge of the seller or that listing or buyer’s licensee, was based on information timely provided by public agencies or by other persons providing information as specified in subdivision (c) that is required to be disclosed pursuant to this article, and ordinary care was exercised in obtaining and transmitting it.

(b) The delivery of any information required to be disclosed by this article to a prospective buyer by a public agency or other person providing information required to be disclosed pursuant to this article shall be deemed to comply with the requirements of this article and shall relieve the seller or any listing or buyer’s licensee of any further duty under this article with respect to that item of information.

(c) The delivery of a report or opinion prepared by a licensed engineer, land surveyor, geologist, structural pest control operator, contractor, or other expert, dealing with matters within the scope of the professional’s license or expertise, shall be sufficient compliance for application of the exemption provided by subdivision (a) if the information is provided to the prospective buyer pursuant to a request therefor, whether written or oral.

SEC. 11.

Section 1102.5 of the Civil Code is amended to read:

1102.5.

If information disclosed in accordance with this article is subsequently rendered inaccurate as a result of any act, occurrence, or agreement subsequent to the delivery of the required disclosures, any inaccuracy resulting therefrom does not constitute a violation of this article. If at the time the disclosures are required to be made, an item of information required to be disclosed is unknown or not available to the seller, and the seller or his or her real estate licensee has made a reasonable effort to ascertain it, the seller may use an approximation of the information, provided the approximation is clearly identified as such, is reasonable, is based on the best information reasonably available to the seller or his or her real estate licensee, and is not used for the purpose of circumventing or evading this article.

SEC. 12.

Section 1102.6a of the Civil Code is amended to read:

1102.6a.

(a) Any city or county may elect to require disclosures on the form set forth in subdivision (b) in addition to those disclosures required by Section 1102.6. However, this section does not affect or limit the authority of a city or county to require disclosures on a different disclosure form in connection with transactions subject to this article pursuant to an ordinance adopted prior to July 1, 1990.

(b) Disclosures required pursuant to this section pertaining to the property proposed to be sold, shall be set forth in, and shall be made on a copy of, the following disclosure form:

PRINTER PLEASE NOTE: TIP-IN MATERIAL TO BE INSERTED

(c) This section does not preclude the use of addenda to the form specified in subdivision (b) to facilitate the required disclosures. This section does not preclude a city or county from using the disclosure form specified in subdivision (b) for a purpose other than that specified in this section.

(d) (1) On and after January 1, 2005, if a city or county adopts a different or additional disclosure form pursuant to this section regarding the proximity or effects of an airport, the statement in that form shall contain, at a minimum, the information in the statement “Notice of Airport in Vicinity” found in Section 11010 of the Business and Professions Code, or Section 1103.4 or 4255.

(2) On and after January 1, 2006, if a city or county does not adopt a different or additional disclosure form pursuant to this section, then the provision of an “airport influence area” disclosure pursuant to Section 11010 of the Business and Professions Code, or Section 1103.4 or 4255, or if there is not a current airport influence map, a written disclosure of an airport within two statute miles, shall be deemed to satisfy any city or county requirements for the disclosure of airports in connection with sales of real property.

SEC. 13.

Section 1102.6b of the Civil Code is amended to read:

1102.6b.

(a) This section applies to all sales of real property for which all of the following apply:

(1) The sale is subject to this article.

(2) The property being sold is subject to a continuing lien securing the levy of special taxes pursuant to the Mello-Roos Community Facilities Act (Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the Government Code), to a fixed lien assessment collected in installments to secure bonds issued pursuant to the Improvement Bond Act of 1915 (Division 10 (commencing with Section 8500) of the Streets and Highways Code), or to a contractual assessment program authorized pursuant to Chapter 29 (commencing with Section 5898.10) of Part 3 of Division 7 of the Streets and Highway Code.

(3) A notice is not required pursuant to Section 53341.5 of the Government Code.

(b) In addition to any other disclosure required pursuant to this article, the seller of any real property subject to this section shall make a good faith effort to obtain a disclosure notice concerning the special tax as provided for in Section 53340.2 of the Government Code, or a disclosure notice concerning an assessment installment as provided in Section 53754 of the Government Code, from each local agency that levies a special tax pursuant to the Mello-Roos Community Facilities Act, or that collects assessment installments to secure bonds issued pursuant to the Improvement Bond Act of 1915 (Division 10 (commencing with Section 8500) of the Streets and Highways Code), or a disclosure notice concerning the contractual assessment as provided in Section 5898.24 of the Streets and Highways Code, on the property being sold, and shall deliver that notice or those notices to the prospective buyer, as long as the notices are made available by the local agency.

(c) (1) The seller of real property subject to this section may satisfy the disclosure notice requirements in regard to the bonds issued pursuant to the Improvement Bond Act of 1915 (Division 10 (commencing with Section 8500) of the Streets and Highways Code) by delivering a disclosure notice that is substantially equivalent and obtained from another source.

(2) The seller of real property subject to this section may satisfy the disclosure notice requirements in regard to the assessments collected under the contractual assessment program authorized pursuant to Chapter 29 (commencing with Section 5898.10) of Part 3 of Division 7 of the Streets and Highway Code by delivering a disclosure notice that is substantially equivalent and obtained from another source.

(3) For the purposes of this section, a substantially equivalent disclosure notice includes, but is not limited to, a copy of the most recent year’s property tax bill or an itemization of current assessment amounts applicable to the property.

(d) (1) Notwithstanding subdivision (c), the seller of real property subject to this section may satisfy the disclosure notice requirements of this section by delivering a disclosure notice obtained from a nongovernmental source that satisfies the requirements of paragraph (2).

(2) A notice provided by a private entity other than a designated office, department, or bureau of the levying entity may be modified as needed to clearly and accurately describe a special tax pursuant to the Mello-Roos Community Facilities Act levied against the property or to clearly and accurately consolidate information about two or more districts that levy or are authorized to levy a special tax pursuant to the Mello-Roos Community Facilities Act against the property, and shall include the name of the Mello-Roos entity levying taxes against the property, the annual tax due for the Mello-Roos entity for the current tax year, the maximum tax that may be levied against the property in any year, the percentage by which the maximum tax for the Mello-Roos entity may increase per year, and the date until the tax may be levied against the property for the Mello-Roos entity and a contact telephone number, if available, for further information about the Mello-Roos entity. A notice provided by a private entity other than a designated office, department, or bureau of the levying entity may be modified as needed to clearly and accurately describe special assessments and bonds pursuant to the Improvement Bond Act of 1915 levied against the property, or to clearly and accurately consolidate information about two or more districts that levy or are authorized to levy special assessments and bonds pursuant to the Improvement Bond Act of 1915 against the property, and shall include the name of the special assessments and bonds issued pursuant to the Improvement Bond Act of 1915, the current annual tax on the property for the special assessments and bonds issued pursuant to the Improvement Bond Act of 1915 and a contact telephone number, if available, for further information about the special assessments and bonds issued pursuant to the Improvement Bond Act of 1915.

(3) This section does not change the ability to make disclosures pursuant to Section 1102.4 of the Civil Code.

(e) If a disclosure received pursuant to subdivision (b), (c), or (d) has been delivered to the buyer, a seller or his or her real estate licensee is not required to provide additional information concerning, and information in the disclosure shall be deemed to satisfy the responsibility of the seller or his or her real estate licensee to inform the buyer regarding the special tax or assessment installments and the district. Notwithstanding subdivision (b), (c), or (d), nothing in this section imposes a duty to discover a special tax or assessment installments or the existence of any levying district not actually known to the real estate licensees.

SEC. 14.

Section 1102.6c of the Civil Code is amended to read:

1102.6c.

(a) In addition to any other disclosure required pursuant to this article, it shall be the sole responsibility of the seller of any real property subject to this article, or his or her real estate licensee, to deliver to the prospective buyer a disclosure notice that includes both of the following:

(1) A notice, in at least 12-point type or a contrasting color, as follows:

“California property tax law requires the Assessor to revalue real property at the time the ownership of the property changes. Because of this law, you may receive one or two supplemental tax bills, depending on when your loan closes.

The supplemental tax bills are not mailed to your lender. If you have arranged for your property tax payments to be paid through an impound account, the supplemental tax bills will not be paid by your lender. It is your responsibility to pay these supplemental bills directly to the tax collector. If you have any question concerning this matter, please call your local tax collector’s office.”

(2) A title, in at least 14-point type or a contrasting color, that reads as follows: “Notice of Your ’Supplemental’ Property Tax Bill.”

(b) The disclosure notice requirements of this section may be satisfied by delivering a disclosure notice pursuant to Section 1102.6b that satisfies the requirements of subdivision (a).

SEC. 15.

Section 1102.9 of the Civil Code is amended to read:

1102.9.

Any disclosure made pursuant to this article may be amended in writing by the seller or his or her real estate licensee, but the amendment shall be subject to Section 1102.3 or 1102.3a.

SEC. 16.

Section 1102.12 of the Civil Code is amended to read:

1102.12.

(a) In a real estate transaction subject to this article, a buyer’s licensee or a dual licensee shall, except as otherwise provided in this article, deliver the disclosure required by this article to the buyer, unless the seller has given other written instructions for delivery. If there is no real estate broker in a transaction, the seller shall deliver the disclosure required by this article to the buyer.

(b) If a real estate licensee responsible for delivering the disclosures under this section cannot obtain the disclosure document required and does not have written assurance from the buyer that the disclosure has been received, the real estate licensee shall advise the buyer in writing of his or her rights to the disclosure. A real estate licensee responsible for delivering disclosures under this section shall maintain a record of the action taken to effect compliance in accordance with Section 10148 of the Business and Professions Code.

SEC. 17.

Section 1102.14 of the Civil Code is repealed.

SEC. 18.

Section 1102.155 of the Civil Code is amended to read:

1102.155.

(a) (1) The seller of residential real property subject to this article shall disclose, in writing, that Section 1101.4 requires that California single-family residences be equipped with water-conserving plumbing fixtures on or before January 1, 2017, and shall disclose whether the property includes any noncompliant plumbing fixtures as defined in subdivision (c) of Section 1101.3.

(2) The seller shall affirm that this representation is that of the seller and not a representation of any real estate licensee, and that this disclosure is not intended to be part of any contract between the buyer and the seller. The seller shall further affirm that this disclosure is not a warranty of any kind by the seller or any real estate licensee representing any principal in the transaction and is not a substitute for any inspections or warranties that any principal may wish to obtain.

(b) This section shall become operative on January 1, 2017.

SEC. 19.

Section 1103 of the Civil Code is amended to read:

1103.

(a) For purposes of this article, the definitions in Chapter 1 (commencing with Section 10000) of Part 1 of Division 4 of the Business and Professions Code shall apply.

(b) Except as provided in Section 1103.1, this article applies to a sale, exchange, real property sales contract, as defined in Section 2985, lease with an option to purchase, any other option to purchase, or ground lease coupled with improvements, of any real property described in subdivision (d), or residential stock cooperative, improved with or consisting of not less than one nor more than four dwelling units.

(c) Except as provided in Section 1103.1, this article applies to a resale transaction entered into for a manufactured home, as defined in Section 18007 of the Health and Safety Code, that is classified as personal property intended for use as a residence, or a mobilehome, as defined in Section 18008 of the Health and Safety Code, that is classified as personal property intended for use as a residence, if the real property on which the manufactured home or mobilehome is located is real property described in subdivision (d).

(d) This article shall apply to the transactions described in subdivisions (b) and (c) only if the seller or his or her real estate licensee is required by one or more of the following to disclose the property’s location within a hazard zone:

(1) A person who is acting a real estate licensee for a seller of real property that is located within a special flood hazard area (any type Zone “A” or “V”) designated by the Federal Emergency Management Agency, or the seller if he or she is acting without a real estate licensee, shall disclose to any prospective buyer the fact that the property is located within a special flood hazard area if either:

(A) The seller, or the seller’s real estate licensee, has actual knowledge that the property is within a special flood hazard area.

(B) The local jurisdiction has compiled a list, by parcel, of properties that are within the special flood hazard area and a notice has been posted at the offices of the county recorder, county assessor, and county planning agency that identifies the location of the parcel list.

(2) A person who is acting as a real estate licensee for a seller of real property that is located within an area of potential flooding designated pursuant to Section 8589.5 of the Government Code, or the seller if he or she is acting without a real estate licensee, shall disclose to any prospective buyer the fact that the property is located within an area of potential flooding if either:

(A) The seller, or the seller’s real estate licensee, has actual knowledge that the property is within an inundation area.

(B) The local jurisdiction has compiled a list, by parcel, of properties that are within the inundation area and a notice has been posted at the offices of the county recorder, county assessor, and county planning agency that identifies the location of the parcel list.

(3) A seller of real property that is located within a very high fire hazard severity zone, designated pursuant to Section 51178 of the Government Code, shall disclose to any prospective buyer the fact that the property is located within a very high fire hazard severity zone and is subject to the requirements of Section 51182 of the Government Code if either:

(A) The seller or the seller’s real estate licensee, has actual knowledge that the property is within a very high fire hazard severity zone.

(B) A map that includes the property has been provided to the local agency pursuant to Section 51178 of the Government Code and a notice has been posted at the offices of the county recorder, county assessor, and county planning agency that identifies the location of the map and any information regarding changes to the map received by the local agency.

(4) A person who is acting as a real estate licensee for a seller of real property that is located within an earthquake fault zone, designated pursuant to Section 2622 of the Public Resources Code, or the seller if he or she is acting without a real estate licensee, shall disclose to any prospective buyer the fact that the property is located within a delineated earthquake fault zone if either:

(A) The seller, or the seller’s real estate licensee, has actual knowledge that the property is within a delineated earthquake fault zone.

(B) A map that includes the property has been provided to the city or county pursuant to Section 2622 of the Public Resources Code and a notice has been posted at the offices of the county recorder, county assessor, and county planning agency that identifies the location of the map and any information regarding changes to the map received by the county.

(5) A person who is acting as a real estate licensee for a seller of real property that is located within a seismic hazard zone, designated pursuant to Section 2696 of the Public Resources Code, or the seller if he or she is acting without a real estate licensee shall disclose to any prospective buyer the fact that the property is located within a seismic hazard zone if either:

(A) The seller, or the seller’s real estate licensee, has actual knowledge that the property is within a seismic hazard zone.

(B) A map that includes the property has been provided to the city or county pursuant to Section 2696 of the Public Resources Code and a notice has been posted at the offices of the county recorder, county assessor, and county planning agency that identifies the location of the map and any information regarding changes to the map received by the county.

(6) A seller of real property that is located within a state responsibility area determined by the board, pursuant to Section 4125 of the Public Resources Code, shall disclose to any prospective buyer the fact that the property is located within a wildland area that may contain substantial forest fire risks and hazards and is subject to the requirements of Section 4291 of the Public Resources Code if either:

(A) The seller, or the seller’s real estate licensee, has actual knowledge that the property is within a wildland fire zone.

(B) A map that includes the property has been provided to the city or county pursuant to Section 4125 of the Public Resources Code and a notice has been posted at the offices of the county recorder, county assessor, and county planning agency that identifies the location of the map and any information regarding changes to the map received by the county.

~~(d)~~

(e) Any waiver of the requirements of this article is void as against public policy.

SEC. 20.

Section 1103.1 of the Civil Code is amended to read:

1103.1.

(a) This article does not apply to the following sales:

(1) Sales pursuant to court order, including, but not limited to, sales ordered by a probate court in administration of an estate, sales pursuant to a writ of execution, sales by any foreclosure sale, sales by a trustee in bankruptcy, sales by eminent domain, and sales resulting from a decree for specific performance.

(2) Sales to a mortgagee by a mortgagor or successor in interest who is in default, sales to a beneficiary of a deed of trust by a trustor or successor in interest who is in default, transfers by any foreclosure sale after default, any foreclosure sale after default in an obligation secured by a mortgage, sale under a power of sale or any foreclosure sale under a decree of foreclosure after default in an obligation secured by a deed of trust or secured by any other instrument containing a power of sale, or sales by a mortgagee or a beneficiary under a deed of trust who has acquired the real property at a sale conducted pursuant to a power of sale under a mortgage or deed of trust or a sale pursuant to a decree of foreclosure or has acquired the real property by a deed in lieu of foreclosure.

(3) Sales by a fiduciary in the course of the administration of a trust, guardianship, conservatorship, or decedent’s estate. This exemption shall not apply to a sale if the trustee is a natural person who is a trustee of a revocable trust and he or she is a former owner of the property or an occupant in possession of the property within the preceding year.

(4) Sales from one coowner to one or more other coowners.

(5) Sales made to a spouse, or to a person or persons in the lineal line of consanguinity of one or more of the sellers.

(6) Sales between spouses resulting from a judgment of dissolution of marriage or of legal separation of the parties or from a property settlement agreement incidental to that judgment.

(7) Sales by the Controller in the course of administering Chapter 7 (commencing with Section 1500) of Title 10 of Part 3 of the Code of Civil Procedure.

(8) Sales under Chapter 7 (commencing with Section 3691) or Chapter 8 (commencing with Section 3771) of Part 6 of Division 1 of the Revenue and Taxation Code.

(9) Sales or exchanges to or from any governmental entity.

(b) Sales not subject to this article may be subject to other disclosure requirements, including those under Sections 8589.3, 8589.4, and 51183.5 of the Government Code and Sections 2621.9, 2694, and 4136 of the Public Resources Code. In sales not subject to this article, real estate licensees may make required disclosures in a separate writing.

SEC. 21.

Section 1103.2 of the Civil Code is amended to read:

1103.2.

(a) The disclosures required by this article are set forth in, and shall be made on a copy of, the following Natural Hazard Disclosure Statement:

NATURAL HAZARD DISCLOSURE STATEMENT

This statement applies to the following property:

The seller and his or her real estate licensee(s) or a third-party consultant disclose the following information with the knowledge that even though this is not a warranty, prospective buyers may rely on this information in deciding whether and on what terms to purchase the subject property. Seller hereby authorizes any real estate licensee(s) representing any principal(s) in this action to provide a copy of this statement to any person or entity in connection with any actual or anticipated sale of the property.
The following are representations made by the seller and his or her real estate licensee(s) based on their knowledge and maps drawn by the state and federal governments. This information is a disclosure and is not intended to be part of any contract between the seller and buyer.

THIS REAL PROPERTY LIES WITHIN THE FOLLOWING HAZARDOUS AREA(S):

	A SPECIAL FLOOD HAZARD AREA (Any type Zone “A” or “V”) designated by the Federal Emergency Management Agency.

	Yes ____ No ____ Do not know and _____ information not _____ available from local _____ jurisdiction ____

	AN AREA OF POTENTIAL FLOODING shown on a dam failure inundation map pursuant to Section 8589.5 of the Government Code.

	Yes ____ No ____ Do not know and _____ information not _____ available from local _____ jurisdiction ____

	A VERY HIGH FIRE HAZARD SEVERITY ZONE pursuant to Section 51178 or 51179 of the Government Code. The owner of this property is subject to the maintenance requirements of Section 51182 of the Government Code.

	Yes ____ No ____

	A WILDLAND AREA THAT MAY CONTAIN SUBSTANTIAL FOREST FIRE RISKS AND HAZARDS pursuant to Section 4125 of the Public Resources Code. The owner of this property is subject to the maintenance requirements of Section 4291 of the Public Resources Code. Additionally, it is not the state’s responsibility to provide fire protection services to any building or structure located within the wildlands unless the Department of Forestry and Fire Protection has entered into a cooperative agreement with a local agency for those purposes pursuant to Section 4142 of the Public Resources Code.

	Yes ____ No ____

	AN EARTHQUAKE FAULT ZONE pursuant to Section 2622 of the Public Resources Code.

	Yes ____ No ____

	A SEISMIC HAZARD ZONE pursuant to Section 2696 of the Public Resources Code.

	Yes (Landslide Zone)____________ Yes (Liquefaction Zone) ______ No ____ Map not yet released by state ____

THESE HAZARDS MAY LIMIT YOUR ABILITY TO DEVELOP THE REAL PROPERTY, TO OBTAIN INSURANCE, OR TO RECEIVE ASSISTANCE AFTER A DISASTER.

THE MAPS ON WHICH THESE DISCLOSURES ARE BASED ESTIMATE WHERE NATURAL HAZARDS EXIST. THEY ARE NOT DEFINITIVE INDICATORS OF WHETHER OR NOT A PROPERTY WILL BE AFFECTED BY A NATURAL DISASTER. SELLER(S) AND BUYER(S) MAY WISH TO OBTAIN PROFESSIONAL ADVICE REGARDING THOSE HAZARDS AND OTHER HAZARDS THAT MAY AFFECT THE PROPERTY.

Signature of Seller(s)	Date
Signature of Seller(s)	Date

Seller’s Licensee(s)	Date
Seller’s Licensee(s)	Date

Check only one of the following: _____

◻ Seller(s) and their real estate licensee(s) represent that the information herein is true and correct to the best of their knowledge as of the date signed by the transferor(s) and agent(s).
_____
◻ Seller(s) and their real estate licensee(s) acknowledge that they have exercised good faith in the selection of a third-party report provider as required in Civil Code Section 1103.7, and that the representations made in this Natural Hazard Disclosure Statement are based upon information provided by the independent third-party disclosure provider as a substituted disclosure pursuant to Civil Code Section 1103.4. Neither seller(s) nor their real estate licensee(s) (1) has independently verified the information contained in this statement and report or (2) is personally aware of any errors or inaccuracies in the information contained on the statement. This statement was prepared by the provider below:

Third-Party Disclosure Provider(s)	Date

Buyer represents that he or she has read and understands this document. Pursuant to Civil Code Section 1103.8, the representations made in this Natural Hazard Disclosure Statement do not constitute all of the seller’s or real estate licensee’s disclosure obligations in this transaction.

Signature of Buyer(s)	Date
Signature of Buyer(s)	Date

(b) If an earthquake fault zone, seismic hazard zone, very high fire hazard severity zone, or wildland fire area map or accompanying information is not of sufficient accuracy or scale that a reasonable person can determine if the subject real property is included in a natural hazard area, the seller or seller’s real estate licensee shall mark “Yes” on the Natural Hazard Disclosure Statement. The seller’s real estate licensee may mark “No” on the Natural Hazard Disclosure Statement if he or she attaches a report prepared pursuant to subdivision (c) of Section 1103.4 that verifies the property is not in the hazard zone. Nothing in this subdivision is intended to limit or abridge any existing duty of the seller or the seller’s real estate licensees to exercise reasonable care in making a determination under this subdivision.

(c) If the Federal Emergency Management Agency has issued a Letter of Map Revision confirming that a property is no longer within a special flood hazard area, then the seller or seller’s real estate licensee may mark “No” on the Natural Hazard Disclosure Statement, even if the map has not yet been updated. The seller or seller’s real estate licensee shall attach a copy of the Letter of Map Revision to the disclosure statement.

(d) If the Federal Emergency Management Agency has issued a Letter of Map Revision confirming that a property is within a special flood hazard area and the location of the letter has been posted pursuant to subdivision (g) of Section 8589.3 of the Government Code, then the seller or seller’s real estate licensee shall mark “Yes” on the Natural Hazard Disclosure Statement, even if the map has not yet been updated. The seller or seller’s real estate licensee shall attach a copy of the Letter of Map Revision to the disclosure statement.

(e) The disclosure required pursuant to this article may be provided by the seller and the seller’s real estate licensee in the Local Option Real Estate Disclosure Statement described in Section 1102.6a, provided that the Local Option Real Estate Disclosure Statement includes substantially the same information and substantially the same warnings that are required by this section.

(f) (1) The legal effect of a consultant’s report delivered to satisfy the exemption provided by Section 1103.4 is not changed when it is accompanied by a Natural Hazard Disclosure Statement.

(2) A consultant’s report shall always be accompanied by a completed and signed Natural Hazard Disclosure Statement.

(3) In a disclosure statement required by this section, a real estate licensee and third-party provider may cause his or her name to be preprinted in lieu of an original signature in the portions of the form reserved for signatures. The use of a preprinted name shall not change the legal effect of the acknowledgment.

(g) The disclosure required by this article is only a disclosure between the seller, the seller’s real estate licensees, and the prospective buyer, and shall not be used by any other party, including, but not limited to, insurance companies, lenders, or governmental agencies, for any purpose.

(h) In any transaction in which a seller has accepted, prior to June 1, 1998, an offer to purchase, the seller, or his or her real estate licensee shall be deemed to have complied with the requirement of subdivision (a) if the seller or real estate licensee delivers to the prospective buyer a statement that includes substantially the same information and warning as the Natural Hazard Disclosure Statement.

SEC. 22.

Section 1103.3 of the Civil Code is amended to read:

1103.3.

(a) The seller of any real property subject to this article shall deliver to the prospective buyer the written statement required by this article, as follows:

(1) In the case of a sale, as soon as practicable before transfer of title.

(2) In the case of sale by a real property sales contract, as defined in Section 2985, or by a lease together with an option to purchase, or a ground lease coupled with improvements, as soon as practicable before the prospective buyer’s execution of the contract. For the purpose of this subdivision, “execution” means the making or acceptance of an offer.

(b) The seller shall indicate compliance with this article either on the real property sales contract, the lease, any addendum attached thereto, or on a separate document.

(c) If any disclosure, or any material amendment of any disclosure, required to be made pursuant to this article is delivered after the execution of an offer to purchase, the prospective buyer shall have three days after delivery in person or five days after delivery by deposit in the mail or delivery of an electronic record, to terminate his or her offer by delivery of a written notice of termination to the seller or the seller’s real estate licensee.

SEC. 23.

Section 1103.4 of the Civil Code is amended to read:

1103.4.

(a) Neither the seller nor any listing licensee or buyer’s licensee shall be liable for any error, inaccuracy, or omission of any information delivered pursuant to this article if the error, inaccuracy, or omission was not within the personal knowledge of the seller or the listing licensee or selling buyer’s licensee and was based on information timely provided by public agencies or by other persons providing information as specified in subdivision (c) that is required to be disclosed pursuant to this article, and ordinary care was exercised in obtaining and transmitting the information.

(b) The delivery of any information required to be disclosed by this article to a prospective buyer by a public agency or other person providing information required to be disclosed pursuant to this article shall be deemed to comply with the requirements of this article and shall relieve the seller, listing licensee, and buyer’s licensee of any further duty under this article with respect to that item of information.

(c) The delivery of a report or opinion prepared by a licensed engineer, land surveyor, geologist, or expert in natural hazard discovery dealing with matters within the scope of the professional’s license or expertise shall be sufficient compliance for application of the exemption provided by subdivision (a) if the information is provided to the prospective buyer pursuant to a request therefor, whether written or oral.

(1) In responding to the request, the expert shall determine whether the property is within an airport influence area as defined in subdivision (b) of Section 11010 of the Business and Professions Code. If the property is within an airport influence area, the report shall contain the following statement:

NOTICE OF AIRPORT IN VICINITY

This property is presently located in the vicinity of an airport, within what is known as an airport influence area. For that reason, the property may be subject to some of the annoyances or inconveniences associated with proximity to airport operations (for example: noise, vibration, or odors). Individual sensitivities to those annoyances can vary from person to person. You may wish to consider what airport annoyances, if any, are associated with the property before you complete your purchase and determine whether they are acceptable to you.

(2) In responding to the request, the expert shall determine whether the property is within the jurisdiction of the San Francisco Bay Conservation and Development Commission, as defined in Section 66620 of the Government Code. If the property is within the commission’s jurisdiction, the report shall contain the following notice:
NOTICE OF SAN FRANCISCO BAY CONSERVATION AND DEVELOPMENT COMMISSION JURISDICTION

This property is located within the jurisdiction of the San Francisco Bay Conservation and Development Commission. Use and development of property within the commission’s jurisdiction may be subject to special regulations, restrictions, and permit requirements. You may wish to investigate and determine whether they are acceptable to you and your intended use of the property before you complete your transaction.

(3) In responding to the request, the expert shall determine whether the property is presently located within one mile of a parcel of real property designated as “Prime Farmland,” “Farmland of Statewide Importance,” “Unique Farmland,” “Farmland of Local Importance,” or “Grazing Land” on the most current “Important Farmland Map” issued by the California Department of Conservation, Division of Land Resource Protection, utilizing solely the county-level GIS map data, if any, available on the Farmland Mapping and Monitoring Program Web site. If the residential property is within one mile of a designated farmland area, the report shall contain the following notice:

NOTICE OF RIGHT TO FARM

This property is located within one mile of a farm or ranch land designated on the current county-level GIS “Important Farmland Map,” issued by the California Department of Conservation, Division of Land Resource Protection. Accordingly, the property may be subject to inconveniences or discomforts resulting from agricultural operations that are a normal and necessary aspect of living in a community with a strong rural character and a healthy agricultural sector. Customary agricultural practices in farm operations may include, but are not limited to, noise, odors, dust, light, insects, the operation of pumps and machinery, the storage and disposal of manure, bee pollination, and the ground or aerial application of fertilizers, pesticides, and herbicides. These agricultural practices may occur at any time during the 24-hour day. Individual sensitivities to those practices can vary from person to person. You may wish to consider the impacts of such agricultural practices before you complete your purchase. Please be advised that you may be barred from obtaining legal remedies against agricultural practices conducted in a manner consistent with proper and accepted customs and standards pursuant to Section 3482.5 of the Civil Code or any pertinent local ordinance.

(4) In responding to the request, the expert shall determine, utilizing map coordinate data made available by the Office of Mine Reclamation, whether the property is presently located within one mile of a mine operation for which map coordinate data has been reported to the director pursuant to Section 2207 of the Public Resources Code. If the expert determines, from the available map coordinate data, that the residential property is located within one mile of a mine operation, the report shall contain the following notice:

NOTICE OF MINING OPERATIONS:

This property is located within one mile of a mine operation for which the mine owner or operator has reported mine location data to the Department of Conservation pursuant to Section 2207 of the Public Resources Code. Accordingly, the property may be subject to inconveniences resulting from mining operations. You may wish to consider the impacts of these practices before you complete your transaction.

SEC. 24.

Section 1103.5 of the Civil Code is amended to read:

1103.5.

(a) After a seller and his or her real estate licensee comply with Section 1103.2, they shall be relieved of further duty under this article with respect to those items of information. The seller and his or her real estate licensee shall not be required to provide notice to the prospective buyer if the information provided subsequently becomes inaccurate as a result of any governmental action, map revision, changed information, or other act or occurrence, unless the seller or real estate licensee has actual knowledge that the information has become inaccurate.

(b) If information disclosed in accordance with this article is subsequently rendered inaccurate as a result of any governmental action, map revision, changed information, or other act or occurrence subsequent to the delivery of the required disclosures, the inaccuracy resulting therefrom does not constitute a violation of this article.

SEC. 25.

Section 1103.8 of the Civil Code is amended to read:

1103.8.

(a) The specification of items for disclosure in this article does not limit or abridge any obligation for disclosure created by any other provision of law or that may exist in order to avoid fraud, misrepresentation, or deceit in the sale transaction. The Legislature does not intend to affect the existing obligations of the parties to a real estate contract, or their licensees, to disclose any fact materially affecting the value and desirability of the property, including, but not limited to, the physical condition of the property and previously received reports of physical inspection noted on the disclosure form provided pursuant to Section 1102.6 or 1102.6a.

(b) Nothing in this article shall be construed to change the duty of a real estate licensee pursuant to Section 2079.

SEC. 26.

Section 1103.9 of the Civil Code is amended to read:

1103.9.

Any disclosure made pursuant to this article may be amended in writing by the seller or his or her real estate licensee, but the amendment shall be subject to Section 1103.3.

SEC. 27.

Section 1103.12 of the Civil Code is amended to read:

1103.12.

(a) In a real estate transaction subject to this article, a buyer’s licensee or a dual licensee shall, except as otherwise provided in this article, deliver the disclosure required by this article to the buyer, unless the seller has given other written instructions for delivery. If there is only one real estate broker in a transaction subject to this article, that real estate licensee shall deliver the disclosure required by this article to the buyer. If there is no real estate broker in a transaction, the seller shall deliver the disclosure required by this article to the buyer.

(b) If a licensed real estate broker responsible for delivering the disclosures under this section cannot obtain the disclosure document required and does not have written assurance from the buyer that the disclosure has been received, the broker shall advise the buyer in writing of his or her rights to the disclosure. A licensed real estate broker responsible for delivering disclosures under this section shall maintain a record of the action taken to effect compliance in accordance with Section 10148 of the Business and Professions Code.

SEC. 28.

Section 1103.14 of the Civil Code is repealed.

SEC. 29.

Section 2079 of the Civil Code is amended to read:

2079.

(a) It is the duty of a real estate licensee, licensed under Division 4 (commencing with Section 10000) of the Business and Professions Code, to a prospective buyer of residential real property comprising one to four dwelling units, or a manufactured home as defined in Section 18007 of the Health and Safety Code, to conduct a reasonably competent and diligent visual inspection of the property offered for sale and to disclose to that prospective buyer all facts materially affecting the value or desirability of the property that an investigation would reveal, if that licensee has a written contract with the seller to find or obtain a buyer or is a broker who acts in cooperation with that licensee to find and obtain a buyer.

(b) It is the duty of a real estate licensee, licensed under Division 4 (commencing with Section 10000) of the Business and Professions Code, to comply with this section and any regulations imposing standards of professional conduct adopted pursuant to Section 10080 of the Business and Professions Code with reference to Sections 10176 and 10177 of the Business and Professions Code.

SEC. 30.

Section 2079.6 of the Civil Code is amended to read:

2079.6.

This article does not apply to sales which are required to be preceded by the furnishing, to a prospective buyer, of a copy of a public report pursuant to Section 11018.1 or Section 11234 of the Business and Professions Code and sales that can be made without a public report pursuant to Section 11010.4 of the Business and Professions Code, unless the property has been previously occupied.

SEC. 31.

Section 2079.7 of the Civil Code is amended to read:

2079.7.

(a) If a consumer information booklet described in Section 10084.1 of the Business and Professions Code is delivered to a buyer in connection with the sale of real property, including property specified in Section 1102 of the Civil Code, or manufactured housing, as defined in Section 18007 of the Health and Safety Code, a seller or licensee is not required to provide additional information concerning, and the information shall be deemed to be adequate to inform the buyer regarding, common environmental hazards, as described in the booklet, that can affect real property.

(b) Notwithstanding subdivision (a), nothing in this section either increases or decreases the duties, if any, of sellers or licensees, including but not limited to, the duties of a seller or licensee under this article, Article 1.5 (commencing with Section 1102) of Chapter 2 of Title 4 of Part 4 of Division 2, or Section 25359.7 of the Health and Safety Code, or alters the duty of a seller or licensee to disclose the existence of known environmental hazards on or affecting the real property.

SEC. 32.

Section 2079.8 of the Civil Code is amended to read:

2079.8.

(a) If a Homeowner’s Guide to Earthquake Safety described in Section 10149 of the Business and Professions Code is delivered to a buyer in connection with the sale of real property, including property specified in Section 1102 or under Chapter 7.5 (commencing with Section 2621) of Division 2 of the Public Resources Code, a seller or licensee is not required to provide additional information concerning, and the information shall be deemed to be adequate to inform the buyer regarding, geologic and seismic hazards, in general, as described in the guide, that may affect real property and mitigating measures that the buyer or seller might consider.

(b) Notwithstanding subdivision (a), nothing in this section increases or decreases the duties, if any, of sellers or licensees, including, but not limited to, the duties of a seller or licensee under this article, Article 1.5 (commencing with Section 1102) of Chapter 2 of Title 4 of Part 4 of Division 2, or under Chapter 7.5 (commencing with Section 2621) of Division 2 of the Public Resources Code, or alters the duty of a seller or licensee to disclose the existence of known hazards on or affecting the real property.

SEC. 33.

Section 2079.9 of the Civil Code is amended to read:

2079.9.

(a) If a Commercial Property Owner’s Guide to Earthquake Safety described in Section 10147 of the Business and Professions Code is delivered to a buyer in connection with the sale of real property, including property specified in Section 1102 or under Chapter 7.5 (commencing with Section 2621) of Division 2 of the Public Resources Code, a seller or licensee is not required to provide additional information concerning, and the information shall be deemed to be adequate to inform the buyer regarding, geologic and seismic hazards, in general, as described in the guide, that may affect real property and mitigating measures that the buyer or seller might consider.

(b) Notwithstanding subdivision (a), nothing in this section increases or decreases the duties, if any, of sellers, their real estate licensees under this article or under Chapter 7.5 (commencing with Section 2621) or Chapter 7.8 (commencing with Section 2690) of Division 2 of the Public Resources Code, or alters the duty of a seller or real estate licensee to disclose the existence of known hazards on or affecting the real property.

SEC. 34.

Section 2079.10 of the Civil Code is amended to read:

2079.10.

(a) If the informational booklet published pursuant to Section 25402.9 of the Public Resources Code, concerning the statewide home energy rating program adopted pursuant to Section 25942 of the Public Resources Code, is delivered to a buyer in connection with the sale of real property, including, but not limited to, property specified in Section 1102, manufactured homes as defined in Section 18007 of the Health and Safety Code, and property subject to Chapter 7.5 (commencing with Section 2621) of Division 2 of the Public Resources Code, the seller or licensee is not required to provide information additional to that contained in the booklet concerning home energy ratings, and the information in the booklet shall be deemed to be adequate to inform the buyer about the existence of a statewide home energy rating program.

(b) Notwithstanding subdivision (a), nothing in this section alters any existing duty of the seller or licensee under any other law including, but not limited to, the duties of a seller or licensee under this article, Article 1.5 (commencing with Section 1102) of Chapter 2 of Title 4 of Part 4 of Division 2 of the Civil Code, or Chapter 7.5 (commencing with Section 2621) of Division 2 of the Public Resources Code, to disclose information concerning the existence of a home energy rating program affecting the real property.

(c) If the informational booklet or materials described in Section 375.5 of the Water Code concerning water conservation and water conservation programs are delivered to a buyer in connection with the sale of real property, including property described in subdivision (a), the seller or licensee is not required to provide information concerning water conservation and water conservation programs that is additional to that contained in the booklet or materials, and the information in the booklet or materials shall be deemed to be adequate to inform the buyer about water conservation and water conservation programs.

SEC. 35.

Section 2079.10.5 of the Civil Code is amended to read:

2079.10.5.

(a) Every contract for the sale of residential real property entered into on or after July 1, 2013, shall contain, in not less than 8-point type, a notice as specified below:

NOTICE REGARDING GAS AND HAZARDOUS LIQUID TRANSMISSION PIPELINES

This notice is being provided simply to inform you that information about the general location of gas and hazardous liquid transmission pipelines is available to the public via the National Pipeline Mapping System (NPMS) Internet Web site maintained by the United States Department of Transportation at http://www.npms.phmsa.dot.gov/. To seek further information about possible transmission pipelines near the property, you may contact your local gas utility or other pipeline operators in the area. Contact information for pipeline operators is searchable by ZIP Code and county on the NPMS Internet Web site.

(b) Upon delivery of the notice to the buyer of the real property, the seller or broker is not required to provide information in addition to that contained in the notice regarding gas and hazardous liquid transmission pipelines in subdivision (a). The information in the notice shall be deemed to be adequate to inform the buyer about the existence of a statewide database of the locations of gas and hazardous liquid transmission pipelines and information from the database regarding those locations.

(c) Nothing in this section shall alter any existing duty under any other statute or decisional law imposed upon the seller or broker, including, but not limited to, the duties of a seller or broker under this article, or the duties of a seller or licensee under Article 1.5 (commencing with Section 1102) of Chapter 2 of Title 4 of Part 4 of Division 2.

SEC. 36.

Section 2079.10a of the Civil Code is amended to read:

2079.10a.

(a) Every lease or rental agreement for residential real property entered into on or after July 1, 1999, and every contract for the sale of residential real property comprised of one to four dwelling units entered into on or after that date, shall contain, in not less than 8-point type, a notice as specified in paragraph (1), (2), or (3).

(1) A contract entered into by the parties on or after July 1, 1999, and before September 1, 2005, shall contain the following notice:

Notice: The California Department of Justice, sheriff’s departments, police departments serving jurisdictions of 200,000 or more, and many other local law enforcement authorities maintain for public access a database of the locations of persons required to register pursuant to subdivision (a) of Section 290.4 of the Penal Code. The database is updated on a quarterly basis and is a source of information about the presence of these individuals in any neighborhood. The Department of Justice also maintains a Sex Offender Identification Line through which inquiries about individuals may be made. This is a “900” telephone service. Callers shall have specific information about individuals they are checking. Information regarding neighborhoods is not available through the “900” telephone service.

(2) A contract entered into by the parties on or after September 1, 2005, and before April 1, 2006, shall contain either the notice specified in paragraph (1) or the notice specified in paragraph (3).

(3) A contract entered into by the parties on or after April 1, 2006, shall contain the following notice:

Notice: Pursuant to Section 290.46 of the Penal Code, information about specified registered sex offenders is made available to the public via an Internet Web site maintained by the Department of Justice at www.meganslaw.ca.gov. Depending on an offender’s criminal history, this information will include either the address at which the offender resides or the community of residence and ZIP Code in which he or she resides.

(b) Subject to subdivision (c), upon delivery of the notice to the lessee or buyer of the real property, the lessor, seller, or broker is not required to provide information in addition to that contained in the notice regarding the proximity of registered sex offenders. The information in the notice shall be deemed to be adequate to inform the lessee or buyer about the existence of a statewide database of the locations of registered sex offenders and information from the database regarding those locations. The information in the notice shall not give rise to any cause of action against the disclosing party by a registered sex offender.

(c) Notwithstanding subdivisions (a) and (b), nothing in this section shall alter any existing duty of the lessor, seller, or licensee under any other statute or decisional law including, but not limited to, the duties of a lessor, seller, or broker under this article, or the duties of a seller or licensee under Article 1.5 (commencing with Section 1102) of Chapter 2 of Title 4 of Part 4 of Division 2.

SEC. 37.

Section 2079.13 of the Civil Code is repealed.

SEC. 38.

Section 2079.13 is added to the Civil Code, to read:

2079.13.

(a) For purposes of this article, the definitions in Chapter 1 (commencing with Section 10000) of Part 1 of Division 4 of the Business and Professions Code shall apply.

(b) Notwithstanding subdivision (a), for the purposes of Sections 2079 to 2079.6, inclusive, and Sections 2079.9 to 2079.24, inclusive, owners and managers of multifamily residential properties improved by more than four residential units are not “sellers” and a lease of that property does not constitute a “sale.”

SEC. 39.

Section 2079.14 of the Civil Code is amended to read:

2079.14.

A real estate licensee shall provide the seller and buyer in a real property transaction with a copy of the disclosure form specified in Section 2079.16, and, except as provided in subdivision (c), shall obtain a signed acknowledgment of receipt from that seller or buyer, except as provided in this section or Section 2079.15, as follows:

(a) The seller’s licensee, if any, shall provide the disclosure form to the seller prior to entering into the listing agreement.

(b) The buyer’s licensee shall provide the disclosure form to the buyer as soon as practicable prior to execution of the buyer’s offer to purchase. If the offer to purchase is not prepared by the buyer’s licensee, the buyer’s licensee shall present the disclosure form to the buyer not later than the next business day after receiving the offer to purchase from the buyer.

SEC. 40.

Section 2079.15 of the Civil Code is amended to read:

2079.15.

In any circumstance in which the seller or buyer refuses to sign an acknowledgment of receipt pursuant to Section 2079.14, the real estate ~~licensee, or an associate licensee acting for a real estate~~ licensee, shall set forth, sign, and date a written declaration of the facts of the refusal.

SEC. 41.

Section 2079.16 of the Civil Code is amended to read:

2079.16.

The disclosure form required by Section 2079.14 shall contain at a minimum the following:

DISCLOSURE REGARDING
REAL ESTATE AGENCY RELATIONSHIP WITH LICENSEES
(As required by Section 2079.14 of the Civil Code)

When you enter into a relationship with a real estate licensee regarding a real estate transaction, you should from the outset understand what type of agency relationship or representation you wish to have with the licensee in the transaction.

SELLER’S LICENSE LICENSEE

A Seller’s licensee under a listing agreement with the Seller acts as the licensee for the Seller only. A Seller’s licensee has the following affirmative obligations:
To the Seller:

A fiduciary duty of care, integrity, honesty, and loyalty in dealings with the Seller.
To the Buyer and the Seller:

(a) Diligent exercise of reasonable skill and care in performance of the licensee’s duties.

(b) A duty of honest and fair dealing and good faith.

(c) A duty to disclose all facts known to the licensee materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the parties.

A Seller’s licensee may have other listing agreements with other Sellers. The affirmative duties to the Buyer and Seller set forth above in (a), (b) and (c) do not obligate a licensee to reveal to either party any confidential information obtained from the other party or from other clients. Confidential information includes, but is not limited to, facts relating to the party’s financial position, motivations, bargaining position, or other personal information that may impact price, such as that the Seller will accept a price less than the listing price or that the Buyer will pay a price greater than the price offered.

BUYER’S LICENSEE

The Buyer’s licensee may also be providing services to other Buyers in regard to the same or different properties. A licensee can, with the Buyer’s agreement, agree to act as licensee for ~~only the Buyer.~~ the Buyer and not the Seller. The Buyer’s licensee may receive compensation for services rendered, either in full or in part from the Seller, but that does not make the Buyer’s licensee the Seller’s licensee. A licensee acting ~~only~~ for a Buyer has the following affirmative obligations:
To the Buyer:

A fiduciary duty of care, integrity, honesty, and loyalty in dealings with the Buyer.
To the Buyer and the Seller:

(a) Diligent exercise of reasonable skill and care in performance of the licensee’s duties.

(b) A duty of honest and fair dealing and good faith.

(c) A duty to disclose all facts known to the real estate licensee materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the parties.

The affirmative duties to the Buyer and Seller set forth above in (a), (b) and (c) do not obligate a licensee to reveal to either party any confidential information obtained from the other party or from other clients. Confidential information includes, but is not limited to, facts relating to the party’s financial position, motivations, bargaining position, or other personal information that may impact price, such as that the Seller will accept a price less than the listing price or that the Buyer will pay a price greater than the price offered.

LICENSEE REPRESENTING BOTH SELLER AND BUYER

A real estate licensee, either acting directly or through one or more associate licensees, can legally represent both the Seller and the Buyer in a transaction, but only with the knowledge and consent of both the Seller and the Buyer.

In a dual broker or dual licensee situation, the dual broker and dual licensee have the following affirmative obligations to both the Seller and the Buyer:

(a) A fiduciary duty of care, integrity, honesty and loyalty in the dealings with either the Seller or the Buyer.

(b) Other duties to the Seller and the Buyer as stated above in their respective sections.

In representing both Seller and Buyer, the dual broker or dual licensee may not, without the express permission of the respective party, disclose to the other party in that transaction any confidential information obtained from the other party that does not involve the affirmative duties set forth above in (a) and (b). Confidential information includes, but is not limited to, facts relating to the party’s financial position, motivations, bargaining position, or other personal information that may impact price such as the Seller will accept a price less than the listing price or that the Buyer will pay a price greater than the price offered.

CONSUMER RESPONSIBILITY

Once you have decided on the offer you wish to make or accept, you will receive a confirmation of the licensee relationship. Please pay attention to that confirmation to make sure you are comfortable with that relationship and it reflects your understanding of it.

The above duties of the licensee in a real estate transaction do not relieve a Seller or Buyer from the responsibility to protect his or her own interests including reading all documents, reports, and disclosures. The Buyer has a duty to exercise reasonable care to protect himself or herself including obtaining and considering those facts which are known to or within the diligent attention and observation of the Buyer. You should carefully read all agreements to assure that they adequately express your understanding of the transaction. A real estate licensee is a person qualified to advise about real estate. If legal or tax advice is desired, consult a competent professional.


Real Estate Broker(date)	Buyer/Seller(date)
	(Signature)

~~Associate Licensee~~ Salesperson or Broker Associate(date)	Buyer/Seller(date)
(Signature)	(Signature)

SEC. 42.

Section 2079.17 of the Civil Code is amended to read:

2079.17.

(a) As soon as practicable, the buyer’s licensee shall disclose to the buyer and seller whether the licensee is acting in the real property transaction as the buyer’s licensee, or as a dual licensee representing both the buyer and the seller. This relationship shall be confirmed in the contract to purchase and sell real property or in a separate writing executed or acknowledged by the seller, the buyer, and the buyer’s licensee prior to or coincident with execution of that contract by the buyer and the seller, respectively.

(b) As soon as practicable, the seller’s licensee shall disclose to the seller whether the seller’s licensee is acting in the real property transaction ~~exclusively~~ as the seller’s licensee, or as a dual broker representing both the buyer and seller. This relationship shall be confirmed in the contract to purchase and sell real property or in a separate writing executed or acknowledged by the seller and the seller’s licensee prior to or coincident with the execution of that contract by the seller.

(Name of Seller’s Broker, Brokerage firm and license number) _____ is the broker of (check one):
[ ]the seller; or
[ ]both the buyer and seller. (dual broker)
(Name of Seller’s Licensee and license number) _____ is (check one):
[ ]is the Seller’s Licensee. (salesperson or broker associate)
[ ]is both the Buyer’s and Seller’s Licensee. (dual licensee)
_____ (Name of Buyer’s Broker, Brokerage firm and license number) _____ is the broker of (check one):
[ ]the buyer; or
[ ]both the buyer and seller. (dual broker)
(Name of Buyer’s Licensee and license number) _____ is (check one):
[ ]the Buyer’s Licensee. (salesperson or broker associate)
[ ]both the Buyer’s and Seller’s Licensee. (dual licensee)

(d) The disclosures and confirmation required by this section shall be in addition to the disclosure required by Section 2079.14. A licensee’s duty to provide disclosure and confirmation of representation in this section may be performed by a real estate salesperson or broker associate affiliated with that broker.

SEC. 43.

Section 2079.18 of the Civil Code is repealed.

SEC. 44.

Section 2079.19 of the Civil Code is amended to read:

2079.19.

The payment of compensation or the obligation to pay compensation to a real estate licensee by the seller or buyer is not necessarily determinative of a particular agency relationship between a real estate licensee and the seller or buyer. Buyers and sellers may have a relationship with a real estate licensee established and governed by a written agreement or an agreement for services for licensed activity without an agency relationship. A seller’s licensee and a buyer’s licensee may agree to share any compensation or commission paid, or any right to any compensation or commission for which an obligation arises as the result of a real estate transaction, and the terms of any such agreement shall not necessarily be determinative of a particular relationship.

SEC. 45.

Section 2079.20 of the Civil Code is amended to read:

2079.20.

Nothing in this article prevents a licensee from selecting a specific form of agency relationship not specifically prohibited by this article if the requirements of Section 2079.14 and Section 2079.17 are complied with.

SEC. 46.

Section 2079.21 of the Civil Code is repealed.

SEC. 47.

Section 2079.21 is added to the Civil Code, to read:

2079.21.

A dual licensee may not, without the express permission of a client, disclose to the other client any confidential information obtained from the other client that does not involve the affirmative duties set forth above. Confidential information includes, but is not limited to, facts relating to the client’s financial position, motivations, bargaining position, or other personal information that may impact price such as the Seller will accept a price less than the listing price or that the buyer will pay a price greater than the price offered.

SEC. 48.

Section 2079.22 of the Civil Code is amended to read:

2079.22.

Nothing in this article precludes a seller’s licensee from also being a buyer’s licensee. If a seller or buyer in a transaction chooses to not be represented by a licensee, that does not, of itself, make that licensee a dual licensee.

SEC. 49.

Section 2079.23 of the Civil Code is amended to read:

2079.23.

(a) A contract between the principal and real estate licensee may be modified or altered to change the relationship at any time before the performance of the act which is the object of the licensee services with the written consent of the parties to the relationship.

(b) A lender or an auction company retained by a lender to control aspects of a transaction of real property subject to this part, including validating the sales price, shall not require, as a condition of receiving the lender’s approval of the transaction, the homeowner or any licensee 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.

SEC. 50.

Section 2079.24 of the Civil Code is amended to read:

2079.24.

Nothing in this article shall be construed to either diminish the duty of disclosure owed to buyers and sellers by licensees including their broker associates, salespersons, and employees or to relieve licensees, including their broker associates, salespersons, and employees from liability for their conduct in connection with acts governed by this ~~article.~~ article or for any breach of a fiduciary duty or a duty of disclosure.

SEC. 51.

Nothing in this act nor in Assembly Bill 749 of the 2017–18 Regular Session shall be construed to affect any agency relationships in a real estate transaction or a fiduciary’s responsibilities and obligations to disclose information relative to a real estate transaction pursuant to Article 6 (commencing with Section 1086) of Chapter 1 of Title 4 of Part 4 of Division 2 of, Article 1.5 (commencing with Section 1102) of Chapter 2 of Title 4 of Part 4 of Division 2 of, or Article 2 (commencing with Section 2079) of Chapter 3 of Title 6 of Part 4 of Division 3 of, the Civil Code.

SEC. 51.SEC. 52.

This act shall not become operative unless ~~____~~ Assembly Bill 749 of the 2017–18 Regular Session, relating to real estate, is enacted and becomes effective on January 1, 2018.

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