Pleasanton Real Estate

Excerpt from CLTA News:

Governor Signs Buyer’s Choice Act into Law
Measure to take Effect Immediately as Urgency Statute

The Governor signed AB 957 (Galgiani), also known as the Buyer’s Choice Act, over the weekend amidst a spate of political gamesmanship that put its passage into question. While the bill had almost no opposition in the Legislature before its signing, it nevertheless faced an uncertain future as one of hundreds of bills that could have been vetoed by a Governor unhappy with the progress of talks over water legislation.

The bill, which takes effect immediately as an urgency statute, prohibits a seller who acquired title to residential real property at a foreclosure sale from requiring a buyer to purchase title insurance, or escrow services from a company chosen by the seller as a condition of receiving offers or selling the residential real property. A transaction subject to the act would not be invalidated solely because of the failure of any person to comply with any provision of the Act. The measure is effective only until January 1, 2015, unless extended by the Legislature.

For commonly asked questions surrounding AB 957, please see the CLTA’s Buyer’s Choice Act FAQ.

Buyer’s Choice Act

Frequently Asked Questions

Q. What is the Buyer’s Choice Act?

A. The Buyers’ Choice Act is a new law that prohibits a seller who acquired property as a foreclosure sale from requiring a buyer to purchase title and escrow services from a company chosen by the seller as a condition to receiving offers or selling the property. It was enacted by Assembly Bill 957 (Galgiani).

Q. Who is a seller under the Buyer’s Choice Act?

A. A seller is defined as a mortgagee or beneficiary under a deed of trust who acquired title to the property at a foreclosure sale, including a trustee, agent, officer or other employee of any mortgagee or beneficiary.

Q. When does the Buyer’s Choice Act become law?

A. On October 12, 2009. The law is an urgency measure and became effective when it was signed by the Governor on October 12, 2009.

Q. Can a buyer agree to accept the recommendations of the seller as to which title or escrow provider to use?

A. Yes, provided that a written notice of the right to make an independent selection of those services is first given by the seller to the buyer.

Q. Does the new law apply to all real estate transactions?

A. No. The law only applies to residential property improved by four or fewer dwelling units.

Q. What settlement services are covered by the law?

A. The law covers title insurance and escrow services.

Q. Are there penalties for violating the Act?

A. Yes. A seller who violates the new law is liable to the buyer for three times all charges made for the title insurance or escrow service. In addition, a seller who violates the law is also considered to have violated their licensing law.

Q. If a person violates the law can the sale be set aside?

A. No. A transaction cannot be invalidated solely because of the failure to comply with the law.

Q. What is the reason the Legislature passed the Buyer’s Choice Act?

A. The Legislative findings and declarations state that the recent troubled real estate market has resulted in a concentration of the majority of homes available for resale within the hand of foreclosing lenders and has dramatically changed the market dynamics affecting ordinary home buyers. The act declares that the potential for unfairness occasioned by the resale of large numbers of foreclosed home requires that protections against abused be made effective immediately.

Q. Does the Act continue indefinitely?

A. The Act is only effective until January 1, 2015 unless it is extended by the Legislature.