This law is designed to protect homeowners in California who are in the foreclosure process from being exploited by home equity purchasers. These situations often arise due to the high value of homes and can lead to homeowners being tricked into selling their properties for much less than they're worth. The law aims to give homeowners the information they need to make wise decisions and ensures that any sales agreements are made transparently and fairly. It also offers protections, such as the opportunity to cancel unfair deals. The overall goal is to safeguard the homeowner's financial interests and promote fair business practices in real estate transactions under distress.

This law defines terms related to buying and selling homes under foreclosure. An 'equity purchaser' is someone buying a foreclosed home, not for personal use, and not through certain exceptions like family transfers or court orders. 'Residence in foreclosure' is a home where the owner lives and is currently facing foreclosure. 'Equity seller' is someone selling such a home. A 'business day' excludes Sundays and specific holidays. The term 'contract' refers to agreements between the buyer and seller regarding the home sale. 'Property owner' means the person who owned the home when foreclosure started.

This law requires that any contract to buy a home in foreclosure be written in large, clear print (at least 10-point bold type) in the language used during negotiations. The contract must be fully filled out, signed, and dated by both the buyer and the seller before the home is officially transferred.

This law requires that any contract involving the sale of a foreclosed home must include all the agreed-upon terms between the buyer and the seller. It should list the buyer's contact details, the home address, the total payment, how and when the payment will be made, and any services promised by the buyer. The contract must also specify when the buyer will take possession, any rental terms, and include a notice about the seller's right to cancel. This notice should be prominently displayed and completed with the buyer's name. The contracts are binding only to the buyer and seller, even after transferring ownership documents.

This section of the law gives a homeowner (equity seller) extra time to back out of a contract with a buyer (equity purchaser) if they're selling their home under certain types of contracts. They can cancel the contract either up until midnight of the fifth business day after signing the contract or before 8 a.m. on the day their property is set to be sold, whichever comes first. To cancel, the homeowner must deliver written notice or send a telegram to the address given in the contract. The cancellation notice doesn't need a specific format, as long as it clearly shows the homeowner's intention not to proceed with the contract.

This law ensures that when selling your home under an equity contract, the contract must clearly inform you of your right to cancel. There should be a bold statement right next to your signature line that says you can cancel without any penalties before a specified time, which must be filled in. You also get a cancellation notice form attached to your contract, which you can easily detach and use to cancel the agreement by delivering it to the buyer before the specified time. The buyer has to give you copies of the contract and this notice. Until the buyer fulfills these requirements, you can cancel the contract any time.

This law section outlines the rules for an "equity purchaser"—someone who buys a home that's in foreclosure. They must follow certain rules when making a contract with the "equity seller," the homeowner. Before the seller's cancellation period ends, the equity purchaser cannot accept any documents from the seller, record property documents, transfer property interest to someone else, or pay the seller. If the seller cancels the contract, the purchaser must return all documents within 10 days. The equity purchaser is also prohibited from making false or misleading statements about the property's value or any transaction details. In some cases, if the seller retains the right to repurchase the home, the purchaser must not put additional mortgages on it without the seller's consent.

This law allows someone who sells property, known as an equity seller, to sue a buyer, called an equity purchaser, for breaking specific parts of certain real estate rules. If the equity seller wins, they can get paid for actual losses, plus their legal fees. The court can also make the buyer pay extra damages, especially if a specific serious rule was broken. However, the court must award at least three times the actual damages for certain severe violations. On the other hand, instead of extra damages, the court might charge a penalty of up to $2,500, but can't do both. Any lawsuit needs to be filed within four years of the violation.

If someone who buys equity in a property breaks certain rules or tricks an equity seller, they can face serious consequences. These include a fine of up to $25,000, up to one year in county jail, or both for each offense.

This law section explains that the rules in this chapter are not the only ones that apply. You still have other legal options and rights outside of what's written here, including different penalties and remedies.

This law says that you can't give up or avoid following the rules in this chapter. If you try to do that, it's not allowed and won't hold up because it goes against what society believes is right.

This law says that if a part of this chapter or its use in certain situations is found to be unconstitutional, the rest of the chapter will still be valid and can be applied to other situations and people.

If you're selling a home that's being foreclosed and you give it to someone else but have an agreement to buy it back, it's usually assumed to be a loan not an outright sale. This can be overruled if there's clear proof otherwise. This rule doesn't affect those who genuinely buy the property or have a claim on it without knowing of any illegal issues. Just knowing the home's in foreclosure doesn't mean you're aware of any problems. This doesn't change the responsibility to check who might have rights to a home in foreclosure.

This law makes it illegal for anyone to start, negotiate, or complete a deal on a home that's in foreclosure if they exploit the homeowner in an extremely unfair way.

If you're involved in an unfair property transaction on a home going through foreclosure in California, you can cancel the deal within two years. To do this, you must notify the buyer and record this notice at the county office. Some exceptions apply, like if the new owner is a genuine buyer who paid fair value. If the buyer doesn't transfer the property's title back within 20 days, you can take legal action to enforce the cancellation. Additionally, if you win in court, you may recover legal costs and lawyers' fees. This law adds to any other legal options you might have.

This law states that if someone buys a home that's going through foreclosure, they are responsible for any harm caused by themselves or anyone working for them while acquiring the home. This includes misleading actions or statements aimed at convincing the homeowner or their family to sell the home. The term 'representative' here refers to anyone who encourages or convinces a homeowner to transfer their home's title during foreclosure to the buyer.

This law states that if a contract tries to limit the responsibility of a buyer involved in an equity purchase deal, the seller can choose to make the whole contract void. The buyer must compensate the seller for any damages caused by such a limitation. Also, any clause in a contract that tries to force arbitration (a way to settle disputes outside of court) for issues under this chapter can be voided by the seller, but only if there are valid reasons to cancel the contract. These rules apply to contracts made on or after January 1, 1991.

If you're acting as a representative for someone buying a home equity, you need to show proof that you have a California Real Estate Sales License and are insured for twice the home's value. You also have to give a written statement confirming this to everyone involved before the sale is complete, swearing it's true under penalty of perjury. If you don't do this, the seller can cancel the contract, and you might have to pay for any losses they suffer because of it.