California AB 851

Existing law regulates sale transactions of real property. On January 7, 2025, the Governor proclaimed a state of emergency to exist in the Counties of Los Angeles and Ventura due to fire and windstorm conditions that caused multiple fires. Executive Order No. N-7-25, signed by the Governor on January 14, 2025, prohibited a buyer from making an unsolicited offer to an owner of real property located in specified ZIP Codes in the County of Los Angeles to purchase the real property for an amount less than what the fair market value of the property was on January 6, 2025. Executive Order No. N-17-25 expanded that prohibition to include real properties in additional specified ZIP Codes. Subsequent executive orders extended the prohibition until July 1, 2025. Existing law makes a violation of the executive order a misdemeanor, as specified. Existing law, 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 Department of Real Estate within the Business, Consumer Services, and Housing Agency. Existing law makes a willful violation of the Real Estate Law a crime. This bill would prohibit a person, as defined, from making an unsolicited offer to purchase residential real property in certain ZIP Codes in the County of Los Angeles covered by the above-described executive orders and other specified ZIP Codes in the Counties of Los Angeles and Ventura. The bill would define "unsolicited offer to purchase" for this purpose. The bill would require the buyer and seller, before the transfer of title in the purchase of residential real property subject to the above-described prohibition, to execute a written attestation affirming compliance with that prohibition, which, if signed, would create a presumption that the accepted offer was solicited by the seller, as specified. The bill would require the buyer to record the signed attestation as an attachment to the deed or other conveyance of title when recording the transfer of title, as specified. Because the bill would expand the crime of perjury, the bill would impose a state-mandated local program. This bill would make a written offer in violation of these provisions by a licensed person under the Real Estate Law on their own behalf, or on behalf of another person while conducting licensed activity, a violation of the person's licensing law, unless SB 641 is enacted and becomes operative, in which case the offer would be a violation of a provision added by SB 641. The bill would authorize the Attorney General, a county counsel, city attorney, or a district attorney to bring a civil action to enforce these provisions. In addition to any other available remedies or penalties, the bill would grant a seller the right to cancel a purchase agreement entered into in violation of these provisions, as specified. The bill would subject a person who violates the above-described prohibition on making an unsolicited offer to purchase real property in those ZIP Codes to an assessment of a civil penalty, and would make the violation a misdemeanor, as specified. By creating new crimes, this bill would impose a state-mandated local program. This bill would make these provisions severable, would make these provisions operative 30 days after the effective date of the bill, and would repeal these provisions on January 1, 2027. This bill would make legislative findings and declarations as to the necessity of a special statute for the Counties of Los Angeles and Ventura. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. This bill would declare that it is to take effect immediately as an urgency statute.