Subdivisions: disbursements of deposits.
- Authorizes developers to use buyer deposits before closing to fund construction of unbuilt subdivision projects.
- Requires developers to provide security bonds and obtain state approval before accessing buyer deposits.
- Mandates full deposit refunds if buyers cannot close when construction completes.
- Allows liquidated damages to exceed 3% of purchase price if specific consumer protections are met.
Assembly Members Ward and Wilson propose new regulations governing how developers can access and use purchaser deposits during subdivision construction, modifying California's framework for real estate development financing. Their legislation permits developers to utilize buyer deposits before project completion while establishing safeguards to protect purchaser interests.
The bill creates a process for developers to access deposit funds early by meeting specific requirements, including obtaining Department of Real Estate approval of project budgets and construction security. Developers must demonstrate sufficient funding to complete construction and secure purchaser consent through detailed disclosures about potential risks. The Department must review developer submissions within 30 days.
For purchaser protection, the legislation mandates prominent notices about deposit risks in public reports and maintains purchasers' right to full deposit refunds if they cannot close at project completion. The bill preserves existing alternatives like escrow depositories and performance bonds while adjusting liquidated damages provisions to align with the new deposit framework. Developers using purchaser funds must provide security through mechanisms like completion bonds or irrevocable letters of credit equal to construction costs.
The Department of Real Estate gains expanded oversight responsibilities, including reviewing project budgets, construction contracts, and security instruments. The bill authorizes the Department to charge fees covering reasonable review costs while requiring timely processing of developer submissions.
 Ash KalraD Assemblymember | Committee Member |  Not Contacted | |
 Rebecca Bauer-KahanD Assemblymember | Committee Member | Not Contacted | |
 Chris WardD Assemblymember | Bill Author | Not Contacted | |
 Isaac BryanD Assemblymember | Committee Member | Not Contacted | |
 Lori WilsonD Assemblymember | Bill Author | Not Contacted |
Email the authors or create an email template to send to all relevant legislators.
Introduced By
- Authorizes developers to use buyer deposits before closing to fund construction of unbuilt subdivision projects.
- Requires developers to provide security bonds and obtain state approval before accessing buyer deposits.
- Mandates full deposit refunds if buyers cannot close when construction completes.
- Allows liquidated damages to exceed 3% of purchase price if specific consumer protections are met.
Email the authors or create an email template to send to all relevant legislators.
Introduced By
Assembly Members Ward and Wilson propose new regulations governing how developers can access and use purchaser deposits during subdivision construction, modifying California's framework for real estate development financing. Their legislation permits developers to utilize buyer deposits before project completion while establishing safeguards to protect purchaser interests.
The bill creates a process for developers to access deposit funds early by meeting specific requirements, including obtaining Department of Real Estate approval of project budgets and construction security. Developers must demonstrate sufficient funding to complete construction and secure purchaser consent through detailed disclosures about potential risks. The Department must review developer submissions within 30 days.
For purchaser protection, the legislation mandates prominent notices about deposit risks in public reports and maintains purchasers' right to full deposit refunds if they cannot close at project completion. The bill preserves existing alternatives like escrow depositories and performance bonds while adjusting liquidated damages provisions to align with the new deposit framework. Developers using purchaser funds must provide security through mechanisms like completion bonds or irrevocable letters of credit equal to construction costs.
The Department of Real Estate gains expanded oversight responsibilities, including reviewing project budgets, construction contracts, and security instruments. The bill authorizes the Department to charge fees covering reasonable review costs while requiring timely processing of developer submissions.
Ash KalraD Assemblymember | Committee Member | Not Contacted | |
Rebecca Bauer-KahanD Assemblymember | Committee Member | Not Contacted | |
Chris WardD Assemblymember | Bill Author | Not Contacted | |
Isaac BryanD Assemblymember | Committee Member | Not Contacted | |
Lori WilsonD Assemblymember | Bill Author | Not Contacted |