SECTIONS 2985-2985.6 - California Statutes

CIVIL CODE

SECTION 2985-2985.6

2985. (a) A real property sales contract is an agreement in which
one party agrees to convey title to real property to another party
upon the satisfaction of specified conditions set forth in the
contract and that does not require conveyance of title within one
year from the date of formation of the contract.
(b) For purposes of this chapter only, a real property sales
contract does not include a contract for purchase of an attached
residential condominium unit entered into pursuant to a conditional
public report issued by the Department of Real Estate pursuant to
Section 11018.12 of the Business and Professions Code.

2985.1. A real property sales contract may not be transferred by
the fee owner of the real property unless accompanied by a transfer
of the real property which is the subject of the contract, and real
property may not be transferred by the fee owner thereof unless
accompanied by an assignment of the contract.
Nothing herein shall be deemed to prohibit the assignment or
pledge of a real property sales contract, as security or for the
purpose of effecting collection thereon, to the holder of a first
lien on the real property which is the subject of the contract
without a transfer of the real property or the transfer of a fee
title in trust without the concurrent assignment of the sales
contract.

2985.2. Any person, or the assignee of such person, who sells a
parcel of land under a sales contract which is not recorded and who
thereafter causes an encumbrance or encumbrances not consented to in
writing by the parties upon such property in an amount which,
together with existing encumbrances thereon exceeds the amount then
due under the contract, or under which the aggregate amount of any
periodic payments exceeds the periodic payments due on the contract,
excluding any pro rata amount for insurance and taxes, shall be
guilty of a public offense punishable by a fine not exceeding ten
thousand dollars ($10,000), or by imprisonment in the state prison,
or in the county jail not exceeding one year, or by both such fine
and imprisonment.

2985.3. Every seller of improved or unimproved real property under
a real property sales contract, or his assignee, who knowingly
receives an installment payment from the buyer under a real property
sales contract at a time when there is then due any payment by the
seller, or his assignee, on an obligation secured by an encumbrance
on the property subject to the real property sales contract, and who
appropriates such payment received from the buyer to a use other than
payment of the amount then due on the seller's or assignee's
obligation, except to the extent the payment received from the buyer
exceeds the amount due from the seller or assignee, is guilty of a
public offense punishable by a fine not exceeding ten thousand
dollars ($10,000), or by imprisonment in the state prison, or in the
county jail not exceeding one year, or by both such fine and
imprisonment.

2985.4. Every seller of improved or unimproved real property under
a real property sales contract who receives pro rata payments for
insurance and taxes shall hold these amounts in trust for the purpose
designated. These amounts shall not be disbursed for any other
purpose without the consent of the payor and any person or
corporation holding an encumbrance on the property.
This section shall not apply to a state- or federal-supervised
assignee of a seller who as agent for the seller receives and
disburses payments.

2985.5. Every real property sales contract entered into after
January 1, 1966, shall contain a statement of:
(a) The number of years required to complete payment in accordance
with the terms of the contract.
(b) The basis upon which the tax estimate is made.

2985.51. (a) Every real property sales contract entered into on and
after January 1, 1978, where the real property that is the subject
of such contract resulted from a division of real property occurring
on or after January 1, 1978, shall contain or have attached thereto a
statement indicating the fact that the division creating the parcel
or parcels to be conveyed:
(1) Was made in compliance with the provisions of the Subdivision
Map Act, Division 2 (commencing with Section 66410) of Title 7 of the
Government Code and local ordinances adopted pursuant thereto, and
in such event the statement shall expressly refer to the location, in
the records of the county recorder for the county in which the real
property is located, of a previously recorded certificate of
compliance or conditional certificate of compliance issued pursuant
to Section 66499.35 of the Government Code with respect to the real
property being sold, or the statement shall describe the real
property to be conveyed as an entire lot or parcel by referencing the
recorded final or parcel map creating the parcel or parcels to be
conveyed and such description shall constitute a certificate of
compliance as set forth in subdivision (d) of Section 66499.35 of the
Government Code. Provided, however, where reference is made to a
recorded parcel map and the approval of such map was conditioned upon
the construction of specified offsite and onsite improvements as a
precondition to the issuance of a permit or grant of approval for the
development of such parcel and the construction of the improvements
has not been completed as of the date of execution of the real
property sales contract, then the statement shall expressly set forth
all such required offsite and onsite improvements; or
(2) Was exempt from the provisions of the Subdivision Map Act and
local ordinances adopted pursuant thereto, and in such event the
statement shall expressly set forth the basis for such exemption; or
(3) Was the subject of a waiver of the provisions of the
Subdivision Map Act and local ordinances adopted pursuant thereto,
and in such event the contract shall have attached thereto a copy of
the document issued by the local agency granting the waiver.
Provided, however, where the granting of the waiver was conditioned
upon the construction of specified offsite and onsite improvements as
a precondition to the issuance of a permit or grant of approval for
the development of the parcel and the construction of the
improvements has not been completed as of the date of execution of
the real property sales contract, then such statement shall expressly
set forth all such required offsite and onsite improvements; or
(4) Was not subject to the provisions of the Subdivision Map Act
and local ordinances adopted pursuant thereto, and in such event the
statement shall expressly set forth the basis for the
nonapplicability of the Subdivision Map Act to the division.
(b) Every real property sales contract entered into after January
1, 1978, where the real property that is the subject of such contract
resulted from a division of real property occurring prior to January
1, 1978, shall:
(1) Contain or have attached thereto a signed statement by the
vendor that the parcel or parcels which are the subject of the
contract have been created in compliance with, or a waiver has been
granted with respect to, the provisions of the Subdivision Map Act,
Division 2 (commencing with Section 66410) of Title 7 of the
Government Code and local ordinances adopted pursuant thereto, or any
prior law regulating the division of land, or, were exempt from or
not otherwise subject to any such law at the time of their creation.
Provided, however, where the division creating the parcel or parcels
being conveyed was by means of a parcel map, or in the event that a
waiver of the provisions of the Subdivision Map Act has been granted,
and the approval of the parcel map or the granting of the waiver was
conditioned upon the construction of specified offsite and onsite
improvements as a precondition to the issuance of a permit or grant
of approval for the development of such parcel and the construction
of the improvements has not been completed as of the date of
execution of the real property sales contract, then such contract
shall expressly set forth all such required offsite and onsite
improvements.
(2) In lieu of the above, the vendor may include in the real
property sales contract a description of the real property being
conveyed as an entire lot or parcel by referencing the recorded final
or parcel map creating the parcel or parcels being conveyed and such
description shall constitute a certificate of compliance as set
forth in subdivision (d) of Section 66499.35 of the Government Code.
Provided, however, where reference is made to a recorded parcel map,
or in the event that a waiver of the provisions of the Subdivision
Map Act has been granted, and the approval of the parcel map or the
granting of the waiver was conditioned upon the construction of
specified offsite and onsite improvements as a precondition to the
issuance of a permit or grant of approval for the development of such
parcel and the construction of the improvements has not been
completed as of the date of execution of the real property sales
contract, then such contract shall expressly set forth all such
required offsite and onsite improvements.
(3) Notwithstanding paragraphs (1) and (2), in the event that the
parcel or parcels which are the subject of the real property sales
contract were not created in compliance with the provisions of the
Subdivision Map Act, Division 2 (commencing with Section 66410) of
Title 7 of the Government Code and local ordinances adopted pursuant
thereto, or any other prior law regulating the division of land, and
were not exempt from, or were otherwise subject to any such law at
the time of their creation, the real property sales contract shall
contain a statement signed by the vendor and vendee acknowledging
such fact. In addition, the vendor shall attach to the real property
sales contract a conditional certificate of compliance issued
pursuant to Section 66499.35 of the Government Code.
(c) In the event that the parcel or parcels which are the subject
of the real property sales contract are found not to have been
created in compliance with, or a waiver has not been granted with
respect to, the provisions of the Subdivision Map Act, Division 2
(commencing with Section 66410) of Title 7 of the Government Code, or
any other prior law regulating the division of land nor to be exempt
from, or otherwise subject to such laws and the vendee has
reasonably relied upon the statement of such compliance or exemption
made by the vendor, or in the event that the vendor has failed to
provide the conditional certificate of compliance as required by
paragraph (3) of subdivision (b), and the vendor knew or should have
known of the fact of such noncompliance, or lack of exemption, or the
failure to provide the conditional certificate of compliance, the
vendee, or his successor in interest, shall be entitled to: (1)
recover from the vendor or his assigns the amount of all costs
incurred by the vendee or his successor in interest in complying with
all conditions imposed pursuant to Section 66499.35 of the
Government Code; or, (2) the real property sales contract, at the
sole option of the vendee, or his successor in interest, shall be
voidable and in such event the vendee or his successor in interest
shall be entitled to damages from the vendor or his assigns. For
purposes of this section, damages shall mean all amounts paid under
the real estate sales contract with interest thereon at the rate of 9
percent per annum, and in addition thereto a civil penalty in the
amount of five hundred dollars ($500) plus attorney's fees and costs.
Any action to enforce the rights of a vendee or his successor in
interest shall be commenced within one year of the date of discovery
of the failure to comply with the provisions of this section.
(d) Any vendor who willfully violates the provisions of
subdivision (a) of this section by knowingly providing a vendee with
a false statement of compliance with, exemption from, waiver of, or
nonapplicability of, the provisions of the Subdivision Map Act, with
respect to the real property that is the subject of the real property
sales contract, shall be guilty of a misdemeanor punishable by a
fine of not to exceed one thousand dollars ($1,000), or imprisonment
for not to exceed six months, or both such fine and imprisonment.
(e) For purposes of this section a real property sales contract is
an agreement wherein one party agrees to convey title to unimproved
real property to another party upon the satisfaction of specified
conditions set forth in the contract and which does not require
conveyance of title within one year from the date of formation of the
contract. Unimproved real property means real property upon which no
permanent structure intended for human occupancy or commercial use
is located.
(f) The provisions of this section shall not apply to a real
property sales contract which, by its terms, requires either a good
faith downpayment and a single payment of the balance of the purchase
price or a single payment of the purchase price upon completion of
the contract, and the provisions of such contract do not require
periodic payment of principal or interest.

2985.6. (a) A buyer shall be entitled to prepay all or any part of
the balance due on any real property sales contract with respect to
the sale of land which has been subdivided into a residential lot or
lots which contain a dwelling for not more than four families entered
into on or after January 1, 1969; provided, however, that the
seller, by an agreement in writing with the buyer, may prohibit
prepayment for up to a 12-month period following the sale.
(b) Any waiver by the buyer of the provisions of this section
shall be deemed contrary to public policy and shall be unenforceable
and void; provided, however, that any such waiver shall in no way
affect the validity of the remainder of the contract.