2009 California Civil Code - Section 1103.20-1103.23 :: Article 1.8. Buyer's Choice Act

SECTION 1103.20-1103.23

1103.20.  This article shall be known, and may be cited, as the
Buyer's Choice Act.

1103.21.  (a) The Legislature finds and declares:
   (1) Sales of foreclosed properties have become a dominant portion
of homes on the resale real estate market.
   (2) The recent troubled real estate market has resulted in a
concentration of the majority of homes available for resale within
the hands of foreclosing lenders and has dramatically changed the
market dynamics affecting ordinary home buyers.
   (3) Preserving the fair negotiability of contract terms is an
important policy goal to be preserved in real estate transactions.
   (4) The potential for unfairness occasioned by the resale of large
numbers of foreclosed homes on the market requires that protections
against abuses be made effective immediately.
   (5) The federal Real Estate Settlement Procedures Act (RESPA)
creates general rules for fair negotiation of settlement services,
prohibits kickbacks and specifically prohibits a seller in a
federally related transaction from requiring a buyer to purchase
title insurance from a particular insurer.
   (6) California law does not specifically prohibit a seller from
imposing, as a condition of sale of a foreclosed home, the purchase
of title insurance or escrow services from a particular insurer or
   (7) Therefore it is necessary to add this act to California law to
provide to a home buyer protection that follows the RESPA model and
applies to, and prevents, the conditioning of a sale of a foreclosed
home on the buyer's purchase of title insurance from a particular
insurer or title company and/or the buyer's purchase of escrow
services from a particular provider.
   (b) It is the intent of the Legislature that, for the purpose of
this act, the sale of a residential real property is deemed to
include the receipt of an offer to purchase that residential real

1103.22.  (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. This section does not prohibit a buyer from
agreeing to accept the services of a title insurer or an escrow agent
recommended by the seller if written notice of the right to make an
independent selection of those services is first provided by the
seller to the buyer.
   (b) 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, including a
trustee, agent, officer, or other employee of any such mortgagee or
   (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
   (c) 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) 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.

1103.23.  This article shall remain in effect only until January 1,
2015, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2015, deletes or extends
that date.

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