Real Property Held - General Provisions - Financial - CA

Section § 18040

This law explains when an industrial loan company in California can buy and own real estate. They can only hold real property if: (a) it's received as payment for a debt; (b) it's bought at foreclosure sales to cover debts owed to them, but they can't bid more than the debt they are owed; (c) it's needed for their business location, though they can't spend more than a third of their capital on these properties and related assets.

The section doesn't apply to properties they acquire specifically to lease out under another provision.

An industrial loan company may purchase, hold and convey real property for the following purposes only:

(a) Real property conveyed to it in satisfaction of debts previously contracted in the course of its business.

(b) Real property purchased at sale under judgments, decrees or mortgage foreclosures or foreclosures of or trustees’ sales under deeds of trust under securities held by it. No company shall bid at any such sale a larger amount than is necessary to satisfy its debt and costs.

(c) Real property necessary as premises for the transaction of its business. No company shall invest directly or indirectly an amount exceeding one-third of its paid-up capital stock and surplus not available for dividends as provided in Section 18319 in the lot and building in which the business of the company is carried on, leasehold improvements, furniture, fixtures, vaults, automobiles, and other personal property, necessary and proper to carry on its business.

(d) The provisions of this section shall not apply to property acquired and held for lease pursuant to Section 18310.

industrial loan company real property debt satisfaction ...

Section § 18041

This law allows the commissioner to create rules about how industrial loan companies can sell real estate they acquire. These companies can't keep any real estate they get for more than five years unless they have written permission from the commissioner.

(a) The commissioner may establish rules and regulations regarding the sale of any real property acquired pursuant to subdivision (a) or (b) of Section 18040, consistent with what constitutes sound business practices for industrial loan companies.

(b) Real property acquired pursuant to subdivision (a) or (b) of Section 18040 shall not be held for a longer period than five years without the written consent of the commissioner.

industrial loan companies real property sale regulations commissioner consent ...

Section § 18042

To buy a property and building needed for running an industrial loan company, or to build such a property, at least three-fourths of all the directors must agree and vote in favor of the decision.

The authority of a three-fourths vote of all the directors is necessary to authorize the purchase of a lot and building necessary as premises for the transaction of business as an industrial loan company or to authorize the construction of such building.

industrial loan company property purchase building construction approval ...

Section § 18043

If an industrial loan company wants to transfer ownership of real estate, it needs to use a formal document that includes the company's official seal. This document must be signed by either the president or vice president, as well as by the secretary or assistant secretary of the company.

Real property held by an industrial loan company shall be conveyed by an instrument under the corporate seal of the corporation, signed by the president or vice president, and the secretary or assistant secretary.

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