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<ns0:Description>
<ns0:Id>20250SB__078496AMD</ns0:Id>
<ns0:VersionNum>96</ns0:VersionNum>
<ns0:History>
<ns0:Action>
<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2025-02-21</ns0:ActionDate>
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<ns0:ActionText>AMENDED_SENATE</ns0:ActionText>
<ns0:ActionDate>2025-04-07</ns0:ActionDate>
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<ns0:ActionDate>2025-05-01</ns0:ActionDate>
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<ns0:ActionText>AMENDED_ASSEMBLY</ns0:ActionText>
<ns0:ActionDate>2025-07-17</ns0:ActionDate>
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<ns0:LegislativeInfo>
<ns0:SessionYear>2025</ns0:SessionYear>
<ns0:SessionNum>0</ns0:SessionNum>
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<ns0:MeasureNum>784</ns0:MeasureNum>
<ns0:MeasureState>AMD</ns0:MeasureState>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Senator Durazo</ns0:AuthorText>
<ns0:AuthorText authorType="COAUTHOR_ORIGINATING">(Coauthor: Senator Allen)</ns0:AuthorText>
<ns0:Authors>
<ns0:Legislator>
<ns0:Contribution>LEAD_AUTHOR</ns0:Contribution>
<ns0:House>SENATE</ns0:House>
<ns0:Name>Durazo</ns0:Name>
</ns0:Legislator>
<ns0:Legislator>
<ns0:Contribution>COAUTHOR</ns0:Contribution>
<ns0:House>SENATE</ns0:House>
<ns0:Name>Allen</ns0:Name>
</ns0:Legislator>
</ns0:Authors>
<ns0:Title> An act to amend Section 7159 of the Business and Professions Code, and to amend Sections 1689.6, 1689.7, and 1689.13 of, and to add Title 1.87 (commencing with Section 1799.220) to Part 4 of Division 3 of, the Civil Code, relating to consumer credit.</ns0:Title>
<ns0:RelatingClause>consumer credit</ns0:RelatingClause>
<ns0:GeneralSubject>
<ns0:Subject>Home improvement loans: right to cancel contracts.</ns0:Subject>
</ns0:GeneralSubject>
<ns0:DigestText>
<html:p>
(1)
<html:span class="EnSpace"/>
Existing law generally regulates various types of consumer credit contracts and transactions, including consumer loans, home solicitation contracts and offers, and home improvement businesses and contracts.
</html:p>
<html:p>This bill would regulate home improvement loans. The bill would require a lender to take specified actions before a consumer executes a contract for a home improvement loan, including obtaining oral confirmation of key terms of the home improvement loan contract, as defined and specified. The bill would require a lender that offers or provides a home improvement loan to make certain information available to the consumer and would prescribe how a lender must respond to requests for information from a consumer. The bill would prohibit a consumer’s repayment obligations under a home improvement
loan, as specified, until the lender has taken specified actions.</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Existing law authorizes a buyer to cancel certain home solicitation contracts or offers until midnight of the 3rd business day after the day on which the buyer signs an agreement or offer to purchase that complies with specified requirements. Existing law authorizes a buyer to cancel a home solicitation contract written for certain home improvement work until midnight of the 3rd business day after the buyer receives a signed and dated copy of the contract or offer to purchase that complies with specified requirements. Existing law requires contracts for a home solicitation contract or offer to include a notice of cancellation form with specified statements as to the buyer’s right to cancel. Existing law permits a buyer to provide a seller an express waiver to this right to cancel, if the contract meets other specified requirements.
</html:p>
<html:p>Existing law requires specific provisions and requirements for home improvement contracts, as defined, that are not governed by the provisions described above. Existing law requires these contracts to include a notice regarding the buyer’s 3-day right to cancel.</html:p>
<html:p>Existing law provides an alternate 5-day period of time to cancel the contracts or offers described above if the buyer or property owner is a senior citizen, as defined, for contracts entered into, or offers to purchase conveyed, on or after January 1, 2021.</html:p>
<html:p>This bill would extend those 3-day and 5-day periods to 5-day and 7-day periods, respectively. The bill would also make conforming changes. The bill would apply these new extended periods to transactions on or after January 1, 2026.</html:p>
</ns0:DigestText>
<ns0:DigestKey>
<ns0:VoteRequired>MAJORITY</ns0:VoteRequired>
<ns0:Appropriation>NO</ns0:Appropriation>
<ns0:FiscalCommittee>YES</ns0:FiscalCommittee>
<ns0:LocalProgram>NO</ns0:LocalProgram>
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<ns0:ImmediateEffect>NO</ns0:ImmediateEffect>
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<ns0:Urgency>NO</ns0:Urgency>
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<ns0:Election>NO</ns0:Election>
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<ns0:Bill id="bill">
<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
<ns0:BillSection id="id_C00A2A1C-1EF4-4FE4-943C-D00120A71835">
<ns0:Num>SECTION 1.</ns0:Num>
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Section 7159 of the
<ns0:DocName>Business and Professions Code</ns0:DocName>
is amended to read:
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<ns0:Fragment>
<ns0:LawSection id="id_C5B16FF7-3F3C-43E5-B864-3D532293D531">
<ns0:Num>7159.</ns0:Num>
<ns0:LawSectionVersion id="id_43EA4648-78DB-4B50-A774-2E13CB5DFDBE">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
This section identifies the projects for which a home improvement contract is required, outlines the contract requirements, and lists the items that shall be included in the contract, or may be provided as an attachment.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
This section does not apply to service and repair contracts that are subject to Section 7159.10, if the contract for the applicable services complies with Sections 7159.10 to 7159.14, inclusive.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
This section does not apply to the sale, installation, and servicing of a fire alarm sold in conjunction with an alarm system, as defined in Section 7590.1, if all costs attributable to making
the fire alarm system operable, including sale and installation costs, do not exceed five hundred dollars ($500), and the licensee complies with the requirements set forth in Section 7159.9.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
This section does not apply to any costs associated with monitoring a burglar or fire alarm system.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
Failure by the licensee, their agent or salesperson, or by a person subject to be licensed under this chapter, to provide the specified information, notices, and disclosures in the contract, or to otherwise fail to comply with any provision of this section, is cause for discipline.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
For purposes of this section, “home improvement contract” means an agreement, whether oral or written, or contained in one or more
documents, between a contractor and an owner or between a contractor and a tenant, regardless of the number of residence or dwelling units contained in the building in which the tenant resides, if the work is to be performed in, to, or upon the residence or dwelling unit of the tenant, for the performance of a home improvement, as defined in Section 7151, and includes all labor, services, and materials to be furnished and performed thereunder, if the aggregate contract price specified in one or more improvement contracts, including all labor, services, and materials to be furnished by the contractor, exceeds five hundred dollars ($500). “Home improvement contract” also means an agreement, whether oral or written, or contained in one or more documents, between a salesperson, whether or not they are a home improvement salesperson, and an owner or a tenant, regardless of the number of residence or
dwelling units contained in the building in which the tenant resides, which provides for the sale, installation, or furnishing of home improvement goods or services.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
In addition to the specific requirements listed under this section, every home improvement contract and any person subject to licensure under this chapter or their agent or salesperson shall comply with all of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
The writing shall be legible.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Any printed form shall be readable. Unless a larger typeface is specified in this article, text in any printed form shall be in at least 10-point typeface and the headings shall be in at least 10-point boldface type.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
Before any work is started, the contractor shall give the buyer a copy of the contract signed and dated by both the contractor and the buyer. The buyer’s receipt of the copy of the contract initiates the buyer’s rights to cancel the contract pursuant to Sections 1689.5 to 1689.14, inclusive, of the Civil Code.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The contract shall contain on the first page, in a typeface no smaller than that generally used in the body of the document, both of the following:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
The date the buyer signed the contract.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
The name and address of the contractor to which the applicable “Notice of Cancellation” is to be mailed, immediately preceded by a statement advising the buyer that the “Notice of Cancellation” may be
sent to the contractor at the address noted on the contract.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
The contract shall include a statement that, upon satisfactory payment being made for any portion of the work performed, the contractor, prior to any further payment being made, shall furnish to the person contracting for the home improvement or swimming pool work a full and unconditional release from any potential lien claimant claim or mechanics lien authorized pursuant to Sections 8400 and 8404 of the Civil Code for that portion of the work for which payment has been made.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
A change-order form for changes or extra work shall be incorporated into the contract and shall become part of the contract only if it is in writing and signed by the parties prior to the commencement of any work covered by a change
order.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
The contract shall contain, in close proximity to the signatures of the owner and contractor, a notice stating that the owner or tenant has the right to require the contractor to have a performance and payment bond.
</html:p>
<html:p>
(7)
<html:span class="EnSpace"/>
If the contract provides for a contractor to furnish joint control, the contractor shall not have any financial or other interest in the joint control.
</html:p>
<html:p>
(8)
<html:span class="EnSpace"/>
The provisions of this section are not exclusive and do not relieve the contractor from compliance with any other applicable provision of law.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
A home improvement contract and any changes to the contract shall be in writing and signed by the parties to the contract prior
to the commencement of work covered by the contract or an applicable change order and, except as provided in paragraph (8) of subdivision (a) of Section 7159.5, shall include or comply with all of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
The name, business address, and license number of the contractor.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
If applicable, the name and registration number of the home improvement salesperson that solicited or negotiated the contract.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
The following heading on the contract form that identifies the type of contract in at least 10-point boldface type: “Home Improvement.”
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
The following statement in at least 12-point boldface type: “You are entitled to a completely filled in copy of
this agreement, signed by both you and the contractor, before any work may be started.”
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
The heading: “Contract Price,” followed by the amount of the contract in dollars and cents.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
If a finance charge will be charged, the heading: “Finance Charge,” followed by the amount in dollars and cents. The finance charge is to be set out separately from the contract amount.
</html:p>
<html:p>
(7)
<html:span class="EnSpace"/>
The heading: “Description of the Project and Description of the Significant Materials to be Used and Equipment to be Installed,” followed by a description of the project and a description of the significant materials to be used and equipment to be installed. For swimming pools, the project description required under this paragraph also shall
include a plan and scale drawing showing the shape, size, dimensions, and the construction and equipment specifications.
</html:p>
<html:p>
(8)
<html:span class="EnSpace"/>
If a downpayment will be charged, the details of the downpayment shall be expressed in substantially the following form, and shall include the text of the notice as specified in subparagraph (C):
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
The heading: “Downpayment.”
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
A space where the actual downpayment appears.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
The following statement in at least 12-point boldface type:
</html:p>
<html:br/>
<html:p>“THE DOWNPAYMENT MAY NOT EXCEED $1,000 OR 10 PERCENT OF THE CONTRACT PRICE, WHICHEVER IS LESS.”</html:p>
<html:br/>
<html:p>
(9)
<html:span class="EnSpace"/>
If payments, other than the downpayment, are to be made before the project is completed, the details of these payments, known as progress payments, shall be expressed in substantially the following form, and shall include the text of the statement as specified in subparagraph (C):
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
A schedule of progress payments shall be preceded by the heading: “Schedule of Progress Payments.”
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Each progress payment shall be stated in dollars and cents and specifically reference the amount of work or services to be performed and materials and equipment to be supplied.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
The section of the contract reserved for the progress payments
shall include the following statement in at least 12-point boldface type:
</html:p>
<html:br/>
<html:p>“The schedule of progress payments must specifically describe each phase of work, including the type and amount of work or services scheduled to be supplied in each phase, along with the amount of each proposed progress payment. IT IS AGAINST THE LAW FOR A CONTRACTOR TO COLLECT PAYMENT FOR WORK NOT YET COMPLETED, OR FOR MATERIALS NOT YET DELIVERED. HOWEVER, A CONTRACTOR MAY REQUIRE A DOWNPAYMENT.”</html:p>
<html:br/>
<html:p>
(10)
<html:span class="EnSpace"/>
The contract shall address the commencement of work to be performed in substantially the following form:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
A statement that describes what constitutes substantial commencement of
work under the contract.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The heading: “Approximate Start Date.”
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
The approximate date on which work will be commenced.
</html:p>
<html:p>
(11)
<html:span class="EnSpace"/>
The estimated completion date of the work shall be referenced in the contract in substantially the following form:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
The heading: “Approximate Completion Date.”
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The approximate date of completion.
</html:p>
<html:p>
(12)
<html:span class="EnSpace"/>
If applicable, the heading: “List of Documents to be Incorporated into the Contract,” followed by the list of documents incorporated into the contract.
</html:p>
<html:p>
(13)
<html:span class="EnSpace"/>
The heading: “Note About Extra Work and Change Orders,” followed by the following statement:
</html:p>
<html:br/>
<html:p>“Extra Work and Change Orders become part of the contract once the order is prepared in writing and signed by the parties prior to the commencement of work covered by the new change order. The order must describe the scope of the extra work or change, the cost to be added or subtracted from the contract, and the effect the order will have on the schedule of progress payments.”</html:p>
<html:br/>
<html:p>
(e)
<html:span class="EnSpace"/>
Except as provided in paragraph (8) of subdivision (a) of Section 7159.5, all of the following notices shall be provided to the owner as part of the contract form as specified or, if otherwise authorized under this subdivision, may be provided as
an attachment to the contract:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
A notice concerning commercial general liability insurance. This notice may be provided as an attachment to the contract if the contract includes the following statement: “A notice concerning
commercial general liability insurance is attached to this contract.” The notice shall include the heading “Commercial General Liability Insurance (CGL),” followed by whichever of the following statements is both relevant and correct:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
“(The name on the license or ‛This contractor’) does not carry commercial general liability insurance.”
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
“(The name on the license or ‛This contractor’) carries commercial general liability insurance written by (the insurance company). You may call (the insurance company) at ____ to check the contractor’s insurance coverage.”
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
“(The name on the license or ‛This contractor’) is self-insured.”
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
“(The name on the license or
‘This contractor’) is a limited liability company that carries liability insurance or maintains other security as required by law. You may call (the insurance company or trust company or bank) at ____ to check on the contractor’s insurance coverage or security.”
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
A notice concerning workers’ compensation insurance. This notice may be provided as an attachment to the contract if the contract includes the statement: “A notice concerning workers’ compensation insurance is attached to this contract.” The notice shall include the heading “Workers’ Compensation Insurance” followed by whichever of the following statements is correct:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
“(The name on the license or ‛This contractor’) has no employees and is exempt from workers’ compensation requirements.”
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
“(The name on the license or ‛This contractor’) carries workers’ compensation insurance for all employees.”
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
A notice that provides the buyer with the following information about the performance of extra or change-order work:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
A statement that the buyer may not require a contractor to perform extra or change-order work without providing written authorization prior to the commencement of work covered by the new change order.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
A statement informing the buyer that extra work or a change order is not enforceable against a buyer unless the change order also identifies all of the following in writing prior to the commencement of work covered by the new
change order:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
The scope of work encompassed by the order.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
The amount to be added or subtracted from the contract.
</html:p>
<html:p>
(iii)
<html:span class="EnSpace"/>
The effect the order will make in the progress payments or the completion date.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
A statement informing the buyer that the contractor’s failure to comply with the requirements of this paragraph does not preclude the recovery of compensation for work performed based upon legal or equitable remedies designed to prevent unjust enrichment.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
A notice with the heading “Mechanics Lien Warning” written as follows:
<html:br/>
</html:p>
<html:br/>
<html:p>“MECHANICS LIEN WARNING:</html:p>
<html:br/>
<html:p>Anyone who helps improve your property, but who is not paid, may record what is called a mechanics lien on your property. A mechanics lien is a claim, like a mortgage or home equity loan, made against your property and recorded with the county recorder.</html:p>
<html:p>Even if you pay your contractor in full, unpaid subcontractors, suppliers, and laborers who helped to improve your property may record mechanics liens and sue you in court to foreclose the lien. If a court finds the lien is valid, you could be forced to pay twice or have a court officer sell your home to pay the lien. Liens can also affect your credit.</html:p>
<html:p>To preserve their right to record a lien, each subcontractor and material
supplier must provide you with a document called a ‘Preliminary Notice.’ This notice is not a lien. The purpose of the notice is to let you know that the person who sends you the notice has the right to record a lien on your property if they are not paid.</html:p>
<html:p>
BE CAREFUL.
<html:span class="EnSpace"/>
The Preliminary Notice can be sent up to 20 days after the subcontractor starts work or the supplier provides material. This can be a big problem if you pay your contractor before you have received the Preliminary Notices.
</html:p>
<html:p>You will not get Preliminary Notices from your prime contractor or from laborers who work on your project. The law assumes that you already know they are improving your property.</html:p>
<html:p>
PROTECT YOURSELF FROM LIENS.
<html:span class="EnSpace"/>
You can protect yourself from liens by getting a list
from your contractor of all the subcontractors and material suppliers that work on your project. Find out from your contractor when these subcontractors started work and when these suppliers delivered goods or materials. Then wait 20 days, paying attention to the Preliminary Notices you receive.
</html:p>
<html:p>
PAY WITH JOINT CHECKS.
<html:span class="EnSpace"/>
One way to protect yourself is to pay with a joint check. When your contractor tells you it is time to pay for the work of a subcontractor or supplier who has provided you with a Preliminary Notice, write a joint check payable to both the contractor and the subcontractor or material supplier.
</html:p>
<html:p>For other ways to prevent liens, visit CSLB’s internet website at www.cslb.ca.gov or call CSLB at 800-321-CSLB (2752).</html:p>
<html:p>REMEMBER, IF YOU DO NOTHING, YOU
RISK HAVING A LIEN PLACED ON YOUR HOME. This can mean that you may have to pay twice, or face the forced sale of your home to pay what you owe.”</html:p>
<html:br/>
<html:p>
(5)
<html:span class="EnSpace"/>
The following notice shall be provided in at least 12-point typeface:
</html:p>
<html:br/>
<html:p>“Information about the Contractors State License Board (CSLB): CSLB is the state consumer protection agency that licenses and regulates construction contractors.</html:p>
<html:p>Contact CSLB for information about the licensed contractor you are considering, including information about disclosable complaints, disciplinary actions, and civil judgments that are reported to CSLB.</html:p>
<html:p>Use only licensed contractors. If you file a complaint
against a licensed contractor within the legal deadline (usually four years), CSLB has authority to investigate the complaint. If you use an unlicensed contractor, CSLB may not be able to help you resolve your complaint. Your only remedy may be in civil court, and you may be liable for damages arising out of any injuries to the unlicensed contractor or the unlicensed contractor’s employees.</html:p>
<html:p>For more information:</html:p>
<html:p>Visit CSLB’s internet website at www.cslb.ca.gov</html:p>
<html:p>Call CSLB at 800-321-CSLB (2752)</html:p>
<html:p>Write CSLB at P.O. Box 26000, Sacramento, CA 95826.”</html:p>
<html:br/>
<html:p>
(6)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
The notice set forth in subparagraph (B) and entitled “Five-Day
Right to Cancel,” or entitled “Seven-Day Right to Cancel” for contracts with a senior citizen, shall be provided to the buyer unless the contract is:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
Negotiated at the contractor’s place of business.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
Subject to the “Seven-Day Right to Cancel,” as set forth in paragraph (7).
</html:p>
<html:p>
(iii)
<html:span class="EnSpace"/>
Subject to licensure under the Alarm Company Act (Chapter 11.6 (commencing with Section 7590)), provided the alarm company licensee complies with Sections 1689.5, 1689.6, and 1689.7 of the Civil Code, as applicable.
</html:p>
<html:br/>
<html:p>
(B)
<html:span class="EnSpace"/>
(i)
<html:span class="EnSpace"/>
“Five-Day Right to Cancel
</html:p>
<html:p>You, the buyer, have the
right to cancel this contract within five business days. You may cancel by emailing, mailing, faxing, or delivering a written notice to the contractor at the contractor’s place of business by midnight of the fifth business day after you received a signed and dated copy of the contract that includes this notice. Include your name, your address, and the date you received the signed copy of the contract and this notice.</html:p>
<html:p>If you cancel, the contractor must return to you anything you paid within 10 days of receiving the notice of cancellation. For your part, you must make available to the contractor at your residence, in substantially as good condition as you received them, goods delivered to you under this contract or sale. Or, you may, if you wish, comply with the contractor’s instructions on how to return the goods at the contractor’s expense and risk. If you do make
the goods available to the contractor and the contractor does not pick them up within 20 days of the date of your notice of cancellation, you may keep them without any further obligation. If you fail to make the goods available to the contractor, or if you agree to return the goods to the contractor and fail to do so, then you remain liable for performance of all obligations under the contract.”</html:p>
<html:br/>
<html:p>
(ii)
<html:span class="EnSpace"/>
References to “five” and “fifth” in the notice set forth in clause (i) shall be changed to “seven” and “seventh” respectively, for a buyer who is a senior citizen.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
The notice required by this paragraph shall comply with all of the following:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
The text of the notice is at least
12-point boldface type.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
The notice is in immediate proximity to a space reserved for the owner’s signature.
</html:p>
<html:p>
(iii)
<html:span class="EnSpace"/>
The owner acknowledges receipt of the notice by signing and dating the notice form in the signature space.
</html:p>
<html:p>
(iv)
<html:span class="EnSpace"/>
The notice is written in the same language, e.g., Spanish, as that principally used in any oral sales presentation.
</html:p>
<html:p>
(v)
<html:span class="EnSpace"/>
The notice may be attached to the contract if the contract includes, in at least 12-point boldface type, a checkbox with one of the following statements, as applicable:
</html:p>
<html:p>
(I)
<html:span class="EnSpace"/>
For a contract with a senior citizen: “The law requires that the contractor give you a
notice explaining your right to cancel. Initial the checkbox if the contractor has given you a ‛Notice of the Seven-Day Right to Cancel.’
<html:span class="ThinSpace"/>
”
</html:p>
<html:p>
(II)
<html:span class="EnSpace"/>
For all other contracts: “The law requires that the contractor give you a notice explaining your right to cancel. Initial the checkbox if the contractor has given you a ‛Notice of the Five-Day Right to Cancel.’”
</html:p>
<html:p>
(vi)
<html:span class="EnSpace"/>
(I)
<html:span class="EnSpace"/>
The notice shall be accompanied by a completed form in duplicate, captioned “Notice of Cancellation,” which also shall be attached to the agreement or offer to purchase and be easily detachable, and which shall contain the following statement written in the same language, e.g., Spanish, as used in the contract:
</html:p>
<html:table id="id_4D356522-DA3C-4F5C-9931-F51B0AA28B8B">
<html:colgroup>
<html:col width="207.0"/>
<html:col width="207.0"/>
</html:colgroup>
<html:tbody>
<html:tr>
<html:td colspan="2">
<html:p class="Center10Point" style="font-size:10pt; text-align:center; text-indent:0pt;">
“Notice of Cancellation”
<html:br/>
</html:p>
</html:td>
</html:tr>
<html:tr>
<html:th valign="bottom"/>
<html:th valign="bottom">
<html:p class="HeaderCentered" style="font-size:9pt; text-align:center; text-indent:0pt;">/enter date of transaction/</html:p>
</html:th>
</html:tr>
<html:tr>
<html:th valign="bottom"/>
<html:th valign="bottom">
<html:p class="Left10Point" style="font-size:10pt; text-align:left; ; text-indent:0pt;">
<html:span class="UnderlinedLeaders"/>
</html:p>
</html:th>
</html:tr>
<html:tr>
<html:th valign="bottom"/>
<html:th valign="bottom">
<html:p class="HeaderCentered" style="font-size:9pt; text-align:center; text-indent:0pt;">(Date)</html:p>
</html:th>
</html:tr>
</html:tbody>
</html:table>
<html:p>“You may cancel this transaction, without any penalty or obligation, within five business days from
the above date.</html:p>
<html:p>If you cancel, any property traded in, any payments made by you under the contract or sale, and any negotiable instrument executed by you will be returned within 10 days following receipt by the seller of your cancellation notice, and any security interest arising out of the transaction will be canceled.</html:p>
<html:p>If you cancel, you must make available to the seller at your residence, in substantially as good condition as when received, any goods delivered to you under this contract or sale, or you may, if you wish, comply with the instructions of the seller regarding the return shipment of the goods at the seller’s expense and risk.</html:p>
<html:p>If you do make the goods available to the seller and the seller does not pick them up within 20 days of the date of your notice of cancellation,
you may retain or dispose of the goods without any further obligation. If you fail to make the goods available to the seller, or if you agree to return the goods to the seller and fail to do so, then you remain liable for performance of all obligations under the contract.”</html:p>
<html:table id="id_1A370BB1-56D3-4D2F-B3B8-5985D8FF60E3">
<html:tbody>
<html:tr>
<html:td>
<html:p>To cancel this transaction, mail or deliver a signed and dated copy of this cancellation notice, or any other written notice, or send a telegram</html:p>
</html:td>
</html:tr>
<html:tr>
<html:td>
<html:p class="Left10Point">
to
<html:span class="UnderlinedLeaders"/>
,
</html:p>
</html:td>
</html:tr>
<html:tr>
<html:td align="center">
<html:p class="Left10Point">
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
/name of seller/
</html:p>
</html:td>
</html:tr>
<html:tr>
<html:td>
<html:p class="Left10Point">
at
<html:span class="UnderlinedLeaders"/>
</html:p>
</html:td>
</html:tr>
<html:tr>
<html:td>
<html:p class="Left10Point">
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
/address of seller’s place of business/
</html:p>
</html:td>
</html:tr>
<html:tr>
<html:td>
<html:p class="Left10Point">
not later than midnight of
<html:span class="UnderlinedLeaders"/>
.
</html:p>
</html:td>
</html:tr>
<html:tr>
<html:td>
<html:p class="Left10Point">
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
(Date)
</html:p>
</html:td>
</html:tr>
<html:tr>
<html:td>
<html:p class="Left10Point">
<html:span class="EmSpace"/>
I hereby cancel this transaction.
<html:span class="EmSpace"/>
<html:span class="UnderlinedLeaders"/>
</html:p>
</html:td>
</html:tr>
<html:tr>
<html:td>
<html:p class="Left10Point">
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
(Date)
</html:p>
</html:td>
</html:tr>
<html:tr>
<html:td>
<html:p class="Left10Point">
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="UnderlinedLeaders"/>
</html:p>
</html:td>
</html:tr>
<html:tr>
<html:td>
<html:p class="Left10Point">
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace">
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
</html:span>
(Buyer’s signature)
</html:p>
</html:td>
</html:tr>
</html:tbody>
</html:table>
<html:p>
(II)
<html:span class="EnSpace"/>
The reference to “five” in the statement set forth in subclause (I) shall be changed to “seven” for a buyer who is a senior citizen.
</html:p>
<html:p>
(7)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
The following notice entitled “Seven-Day Right to Cancel” shall be provided to the buyer for any contract that is written for the repair or restoration of residential premises damaged by any sudden or catastrophic event for which a state of emergency has been declared by the President of the United States or the Governor, or for which a local emergency has been declared by the executive officer or governing body of any city, county, or city and county:
</html:p>
<html:br/>
<html:p>“Seven-Day Right to Cancel</html:p>
<html:p>You, the buyer, have the right to cancel this contract within seven business days. You may cancel by emailing, mailing, faxing, or delivering a written notice to the contractor at the contractor’s place of business by midnight of the seventh business day after you received a signed and dated copy of the contract that includes this notice. Include your name, your address, and the date you received the signed copy of the contract and this notice.</html:p>
<html:p>If you cancel, the contractor must return to you anything you paid within 10 days of receiving the notice of cancellation. For your part, you must make available to the contractor at your residence, in substantially as good condition as you received them, goods delivered to you under this contract or sale. Or, you may, if
you wish, comply with the contractor’s instructions on how to return the goods at the contractor’s expense and risk. If you do make the goods available to the contractor and the contractor does not pick them up within 20 days of the date of your notice of cancellation, you may keep them without any further obligation. If you fail to make the goods available to the contractor, or if you agree to return the goods to the contractor and fail to do so, then you remain liable for performance of all obligations under the contract.”</html:p>
<html:br/>
<html:p>
(B)
<html:span class="EnSpace"/>
The “Seven-Day Right to Cancel” notice required by this subdivision shall comply with all of the following:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
The text of the notice is at least 12-point boldface type.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
The notice is in immediate proximity to a space reserved for the owner’s signature.
</html:p>
<html:p>
(iii)
<html:span class="EnSpace"/>
The owner acknowledges receipt of the notice by signing and dating the notice form in the signature space.
</html:p>
<html:p>
(iv)
<html:span class="EnSpace"/>
The notice is written in the same language, e.g., Spanish, as that principally used in any oral sales presentation.
</html:p>
<html:p>
(v)
<html:span class="EnSpace"/>
The notice may be attached to the contract if the contract includes, in at least 12-point boldface type, a checkbox with the following statement: “The law requires that the contractor give you a notice explaining your right to cancel. Initial the checkbox if the contractor has given you a ‛Notice of the Seven-Day Right to Cancel.’
<html:span class="ThinSpace"/>
”
</html:p>
<html:p>
(vi)
<html:span class="EnSpace"/>
The notice shall be accompanied by a completed form in duplicate, captioned “Notice of Cancellation,” which shall also be attached to the agreement or offer to purchase and be easily detachable, and which shall contain the following statement written in the same language, e.g., Spanish, as used in the contract:
</html:p>
<html:table id="id_299DDA53-221A-4882-B920-2FB428F39459">
<html:colgroup>
<html:col width="207.0"/>
<html:col width="207.0"/>
</html:colgroup>
<html:tbody>
<html:tr>
<html:td colspan="2">
<html:p class="Center10Point" style="font-size:10pt; text-align:center; text-indent:0pt;">
“Notice of Cancellation”
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:br/>
</html:p>
</html:td>
</html:tr>
<html:tr>
<html:th valign="bottom"/>
<html:th valign="bottom">
<html:p class="HeaderCentered" style="font-size:9pt; text-align:center; text-indent:0pt;">/enter date of transaction/</html:p>
</html:th>
</html:tr>
<html:tr>
<html:th valign="bottom"/>
<html:th valign="bottom">
<html:p class="Left10Point" style="font-size:10pt; text-align:left; ; text-indent:0pt;">
<html:span class="UnderlinedLeaders"/>
</html:p>
</html:th>
</html:tr>
<html:tr>
<html:th valign="bottom"/>
<html:th valign="bottom">
<html:p class="HeaderCentered" style="font-size:9pt; text-align:center; text-indent:0pt;">(Date)</html:p>
</html:th>
</html:tr>
</html:tbody>
</html:table>
<html:p>“You may cancel this transaction, without any penalty or obligation, within seven business days from the above date.</html:p>
<html:p>If you cancel, any property traded in, any payments made by you under the contract or sale, and any negotiable instrument executed by you will be returned within 10 days following receipt by the seller of your cancellation notice, and any security interest arising out of the transaction will be canceled.</html:p>
<html:p>If you cancel, you must make available to the seller at your residence, in
substantially as good condition as when received, any goods delivered to you under this contract or sale, or you may, if you wish, comply with the instructions of the seller regarding the return shipment of the goods at the seller’s expense and risk.</html:p>
<html:p>If you do make the goods available to the seller and the seller does not pick them up within 20 days of the date of your notice of cancellation, you may retain or dispose of the goods without any further obligation. If you fail to make the goods available to the seller, or if you agree to return the goods to the seller and fail to do so, then you remain liable for performance of all obligations under the contract.”</html:p>
<html:table id="id_DF239664-D761-4BB0-9FE8-DD8B34F9E2B5">
<html:tbody>
<html:tr>
<html:td>
<html:p>To cancel this transaction, mail or deliver a signed and dated copy of this cancellation notice,
or any other written notice, or send a telegram</html:p>
</html:td>
</html:tr>
<html:tr>
<html:td>
<html:p class="Left10Point">
to
<html:span class="UnderlinedLeaders"/>
,
</html:p>
</html:td>
</html:tr>
<html:tr>
<html:td>
<html:p class="Left10Point">
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace">
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
</html:span>
<html:span class="EmSpace"/>
/name of seller/
</html:p>
</html:td>
</html:tr>
<html:tr>
<html:td>
<html:p class="Left10Point">
at
<html:span class="UnderlinedLeaders"/>
</html:p>
</html:td>
</html:tr>
<html:tr>
<html:td>
<html:p class="Left10Point">
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace">
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
</html:span>
/address of seller’s place of business/
</html:p>
</html:td>
</html:tr>
<html:tr>
<html:td>
<html:p class="Left10Point">
not
later than midnight of
<html:span class="UnderlinedLeaders"/>
.
</html:p>
</html:td>
</html:tr>
<html:tr>
<html:td>
<html:p class="Left10Point">
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace">
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
</html:span>
(Date)
</html:p>
</html:td>
</html:tr>
<html:tr>
<html:td>
<html:p class="Left10Point">
<html:span class="EmSpace"/>
I hereby cancel this transaction.
<html:span class="EmSpace"/>
<html:span class="UnderlinedLeaders"/>
</html:p>
</html:td>
</html:tr>
<html:tr>
<html:td>
<html:p class="Left10Point">
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace">
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
</html:span>
(Date)
</html:p>
</html:td>
</html:tr>
<html:tr>
<html:td>
<html:p class="Left10Point">
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="UnderlinedLeaders"/>
</html:p>
</html:td>
</html:tr>
<html:tr>
<html:td>
<html:p class="Left10Point">
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace">
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
</html:span>
<html:span class="EmSpace"/>
(Buyer’s signature)
</html:p>
</html:td>
</html:tr>
</html:tbody>
</html:table>
<html:p>
(f)
<html:span class="EnSpace"/>
The five-day right to cancel added by the act that amended paragraph (6) of subdivision (e) shall apply to contracts entered into on or after January 1, 2021.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
The five-day and seven-day rights to cancel added by the act in the 2024–25 Regular Session of the Legislature that
amended paragraph (6) of subdivision (e) shall apply to contracts entered into on or after January 1, 2026.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_6F59D716-A292-49BB-818D-1669EB3C90D0">
<ns0:Num>SEC. 2.</ns0:Num>
<ns0:ActionLine action="IS_AMENDED" ns3:href="urn:caml:codes:CIV:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'3.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'PART'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'TITLE'%20and%20caml%3ANum%3D'5.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'CHAPTER'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'1689.6.'%5D)" ns3:label="fractionType: LAW_SECTION" ns3:type="locator">
Section 1689.6 of the
<ns0:DocName>Civil Code</ns0:DocName>
is amended to read:
</ns0:ActionLine>
<ns0:Fragment>
<ns0:LawSection id="id_5DF98A0B-7A35-45E2-841F-3AB6C02FDFA2">
<ns0:Num>1689.6.</ns0:Num>
<ns0:LawSectionVersion id="id_195515EA-8191-42B5-9568-4162B58889A7">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
Except for a contract written pursuant to Section 7151.2 or 7159.10 of the Business and Professions Code, in addition to any other right to revoke an offer, the buyer has the right to cancel a home solicitation contract or offer until midnight of the fifth business day, or until midnight of the seventh business day if the buyer is a senior citizen, after the day on which the buyer signs an agreement or offer to purchase which complies with Section 1689.7.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
In addition to any other right to revoke an offer, the buyer has the right to cancel a home solicitation contract written pursuant to Section 7151.2 of the Business and Professions Code until midnight
of the fifth business day, or until midnight of the seventh business day if the buyer is a senior citizen, after the buyer receives a signed and dated copy of the contract or offer to purchase that complies with Section 1689.7.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
In addition to any other right to revoke an offer, the buyer has the right to cancel a home solicitation contract or offer to purchase written pursuant to Section 7159.10 of the Business and Professions Code, until the buyer receives a signed and dated copy of a service and repair contract that complies with the contract requirements specified in Section 7159.10 of the Business and Professions Code and the work commences.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
For any contract written pursuant to Section 7159.10 of the Business and Professions Code, or otherwise
presented to the buyer as a service and repair contract, unless all of the conforming requirements listed under subdivision (a) of that section are met, the requirements set forth under Section 7159 of the Business and Professions Code shall be applicable, regardless of the aggregate contract price, including the right to cancel as set forth under this section.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
The five-day right to cancel added by the act that amended paragraphs (1) and (2) shall apply to contracts entered into, or offers to purchase conveyed, on or after January 1, 2021.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
The five-day and seven-day rights to cancel added by the act amending paragraphs (1) and (2) in the 2025–26 Regular Session of the Legislature shall apply to contracts entered into, or offers to purchase conveyed, on or after January 1,
2026.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
In addition to any other right to revoke an offer, any buyer has the right to cancel a home solicitation contract or offer for the purchase of a personal emergency response unit until midnight of the seventh business day after the day on which the buyer signs an agreement or offer to purchase which complies with Section 1689.7. This subdivision shall not apply to a personal emergency response unit installed with, and as part of, a home security alarm system subject to the Alarm Company Act (Chapter 11.6 (commencing with Section 7590) of Division 3 of the Business and Professions Code) which has two or more stationary protective devices used to enunciate an intrusion or fire and is installed by
an alarm company operator operating under a current license issued pursuant to the Alarm Company Act, which shall instead be subject to subdivision (a).
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
In addition to any other right to revoke an offer, a buyer has the right to cancel a home solicitation contract or offer for the repair or restoration of residential premises damaged by a disaster that was not void pursuant to Section 1689.14, until midnight of the seventh business day after the buyer signs and dates the contract unless the provisions of Section 1689.15 are applicable.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
Cancellation occurs when the buyer gives written notice of cancellation to the seller at the address specified in the agreement or offer.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
Notice of
cancellation, if given by mail, is effective when deposited in the mail properly addressed with postage prepaid.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
Notice of cancellation given by the buyer need not take the particular form as provided with the contract or offer to purchase and, however expressed, is effective if it indicates the intention of the buyer not to be bound by the home solicitation contract or offer.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
“Personal emergency response unit,” for purposes of this section, means an in-home radio transmitter device or two-way radio device generally, but not exclusively, worn on a neckchain, wrist strap, or clipped to clothing, and connected to a telephone line through which a monitoring station is alerted of an emergency and emergency assistance is summoned.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_E3BF42E7-6C36-43E3-A44C-BC5C97AD3543">
<ns0:Num>SEC. 3.</ns0:Num>
<ns0:ActionLine action="IS_AMENDED" ns3:href="urn:caml:codes:CIV:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'3.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'PART'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'TITLE'%20and%20caml%3ANum%3D'5.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'CHAPTER'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'1689.7.'%5D)" ns3:label="fractionType: LAW_SECTION" ns3:type="locator">
Section 1689.7 of the
<ns0:DocName>Civil Code</ns0:DocName>
is amended to read:
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<ns0:Fragment>
<ns0:LawSection id="id_384EA467-A91A-4BE8-9FBF-46AB0526D1C0">
<ns0:Num>1689.7.</ns0:Num>
<ns0:LawSectionVersion id="id_38B100FE-30AA-45A2-925E-BC9691D1A7AA">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
Except for contracts written pursuant to Sections 7151.2 and 7159.10 of the Business and Professions Code, in a home solicitation contract or offer, the buyer’s agreement or offer to purchase shall be written in the same language, e.g., Spanish, as principally used in the oral sales presentation, shall be dated, shall be signed by the buyer, and except as provided in paragraph (2), shall contain in immediate proximity to the space reserved for the buyer’s signature, a conspicuous statement in a size equal to at least 10-point boldface type, as follows:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
For a buyer who is a senior citizen:
<html:span class="EnSpace"/>
“You, the buyer, may cancel this transaction
at any time prior to midnight of the seventh business day after the date of this transaction. See the attached notice of cancellation form for an explanation of this right.”
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
For all other buyers:
<html:span class="EnSpace"/>
“You, the buyer, may cancel this transaction at any time prior to midnight of the fifth business day after the date of this transaction. See the attached notice of cancellation form for an explanation of this right.”
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The statement required pursuant to this subdivision for a home solicitation contract or offer for the purchase of a personal emergency response unit, as defined in Section 1689.6, that is not installed with and as part of a home security alarm system subject to the Alarm Company Act (Chapter 11.6 (commencing with Section 7590) of Division 3 of the
Business and Professions Code) that has two or more stationary protective devices used to enunciate an intrusion or fire and is installed by an alarm company operator operating under a current license issued pursuant to the Alarm Company Act, is as follows:
<html:span class="EnSpace"/>
“You, the buyer, may cancel this transaction at any time prior to midnight of the seventh business day after the date of this transaction. See the attached notice of cancellation form for an explanation of this right.”
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Except for contracts written pursuant to Sections 7151.2 and 7159.10 of the Business and Professions Code, the statement required pursuant to this subdivision for the repair or restoration of residential premises damaged by a disaster pursuant to subdivision (c) of Section 1689.6 is as follows:
<html:span class="EnSpace"/>
“You, the buyer, may cancel
this transaction at any time prior to midnight of the seventh business day after the date of this transaction. See the attached notice of cancellation form for an explanation of this right.”
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
A home solicitation contract written pursuant to Section 7151.2 of the Business and Professions Code shall be written in
the same language, e.g., Spanish, as principally used in the oral sales presentation. The contract, or an attachment to the contract that is subject to Section 7159 of the Business and Professions Code shall include in immediate proximity to the space reserved for the buyer’s signature, the following statement in a size equal to at least 12-point boldface type, which shall be dated and signed by the buyer:
<html:br/>
</html:p>
<html:p>
<html:h1>“Five-Day Right to Cancel</html:h1>
</html:p>
<html:p>You, the buyer, have the right to cancel this contract within five business days. You may cancel by e-mailing, mailing, faxing, or delivering a written notice to the contractor at the contractor’s place of business by midnight of the fifth business day after you received a signed and dated copy of the contract that includes this notice. Include
your name, your address, and the date you received the signed copy of the contract and this notice.</html:p>
<html:p>
If you cancel, the contractor must return to you anything you paid within 10 days of receiving the notice of cancellation. For your part, you must make available to the contractor at your residence, in substantially as good condition as you received it, any goods delivered to you under this contract or sale. Or, you may, if you wish, comply with the contractor’s instructions on how to return the goods at the contractor’s expense and risk. If you do make the goods available to the contractor and the contractor does not pick them up within 20 days of the date of your notice of cancellation, you may keep them without any further obligation. If you fail to make the goods available to the contractor, or if you agree to return the goods to the contractor and fail to do so,
then you remain liable for performance of all obligations under the contract.”
<html:br/>
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
References to “five” and “fifth” in the statement set forth in subparagraph (A) shall be changed to “seven” and “seventh,” respectively, for a buyer who is a senior citizen.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
The agreement or offer to purchase shall contain on the first page, in a type size no smaller than that generally used in the body of the document, the following: (1) the name and address of the seller to which the notice is to be mailed, and (2) the date the buyer signed the agreement or offer to purchase.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
Except for contracts written pursuant to Sections 7151.2 and 7159.10 of the Business and Professions Code, or except as provided in
subdivision (d), the agreement or offer to purchase shall be accompanied by a completed form in duplicate, captioned “Notice of Cancellation” which shall be attached to the agreement
or offer to purchase and be easily detachable, and which shall contain in type of at least 10-point the following statement written in the same language, e.g., Spanish, as used in the contract:
</html:p>
<html:table id="id_DE218B97-26BD-40B9-B3E3-D00AF5E13CAF">
<html:colgroup>
<html:col width="207.0"/>
<html:col width="207.0"/>
</html:colgroup>
<html:tbody>
<html:tr>
<html:td colspan="2">
<html:p class="Center10Point" style="font-size:10pt; text-align:center; text-indent:0pt;">
“Notice of Cancellation”
<html:br/>
</html:p>
</html:td>
</html:tr>
<html:tr>
<html:td valign="bottom">
<html:p class="HeaderCentered" style="font-size:9pt; text-align:center; text-indent:0pt;"/>
</html:td>
<html:td valign="bottom">
<html:p class="HeaderCentered" style="font-size:9pt; text-align:center; text-indent:0pt;">/enter date of transaction/</html:p>
</html:td>
</html:tr>
<html:tr>
<html:td valign="bottom">
<html:p class="HeaderCentered" style="font-size:9pt; text-align:center; text-indent:0pt;"/>
</html:td>
<html:td valign="bottom">
<html:p class="Left10Point" style="font-size:10pt; text-align:left; ; text-indent:0pt;">
<html:span class="UnderlinedLeaders"/>
</html:p>
</html:td>
</html:tr>
<html:tr>
<html:td valign="bottom">
<html:p class="HeaderCentered" style="font-size:9pt; text-align:center; text-indent:0pt;"/>
</html:td>
<html:td valign="bottom">
<html:p class="HeaderCentered" style="font-size:9pt; text-align:center; text-indent:0pt;">(Date)</html:p>
</html:td>
</html:tr>
</html:tbody>
</html:table>
<html:p>“You may cancel this transaction, without any penalty or obligation, within five business days from the above date.</html:p>
<html:p>If you cancel, any property traded in, any payments made by you under the contract or sale, and any negotiable instrument executed by you will be returned within 10 days following receipt by the seller of your cancellation notice, and any security interest arising out of the transaction will be canceled.</html:p>
<html:p>If you cancel, you must make available to the seller at your residence, in substantially as good condition as when received, any goods delivered to you under this contract or sale, or you may, if you wish, comply with the instructions of the seller regarding the return shipment of the goods at the seller’s expense and risk.</html:p>
<html:p>If you do make the goods available to the seller and the seller does not pick them up within 20 days of the date of your notice of cancellation, you may retain or dispose of the goods without any further obligation. If you fail to make the goods available to the seller, or if you agree to return the goods to the seller and fail to do so, then you remain liable for performance of all obligations under the contract.”</html:p>
<html:table id="id_DC16A5B7-BA1A-4028-B717-7B532D59C639">
<html:tbody>
<html:tr>
<html:td colspan="2" width="406">
<html:span class="EnSpace"/>
To cancel this transaction, mail or deliver a signed and dated copy of this cancellation notice, or any other written notice, or send a telegram
</html:td>
</html:tr>
<html:tr>
<html:td colspan="2" width="406">
<html:p class="Left10Point">
to
<ns0:LabelledField>
<html:span class="SpacedLeaders"/>
/name of seller/
<html:span class="SpacedLeaders"/>
</ns0:LabelledField>
,
</html:p>
</html:td>
</html:tr>
<html:tr>
<html:td colspan="2" width="406">
<html:p class="Left10Point">
at
<ns0:LabelledField>
<html:span class="SpacedLeaders"/>
/address of seller’s place of business/
<html:span class="SpacedLeaders"/>
</ns0:LabelledField>
</html:p>
</html:td>
</html:tr>
<html:tr>
<html:td colspan="2" width="406">
<html:p class="Left10Point">
not later than midnight of
<ns0:LabelledField>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
(Date)
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
</ns0:LabelledField>
.
</html:p>
</html:td>
</html:tr>
<html:tr>
<html:td colspan="2" width="406">
<html:p class="Left10Point">
I hereby cancel this transaction.
<html:span class="EmSpace"/>
<ns0:LabelledField>
<html:span class="SpacedLeaders"/>
(Date)
<html:span class="SpacedLeaders"/>
</ns0:LabelledField>
</html:p>
</html:td>
</html:tr>
<html:tr>
<html:td colspan="2" width="406">
<html:p class="Left10Point">
<html:span class="SpacedLeaders"/>
<ns0:LabelledField>
<html:span class="ThinSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
(Buyer’s signature)
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
<html:span class="EmSpace"/>
</ns0:LabelledField>
</html:p>
</html:td>
</html:tr>
</html:tbody>
</html:table>
<html:p>
(2)
<html:span class="EnSpace"/>
The reference to “five” in the statement set forth in paragraph (1) shall be changed to “seven” for a buyer who is a
senior citizen.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
Any agreement or offer to purchase a personal emergency response unit, as defined in Section 1689.6, which is not installed with and as part of a home security alarm system subject to the Alarm Company Act which has two or more stationary protective devices used to enunciate an intrusion or fire and is installed by an alarm company operator operating under a current license issued pursuant to the Alarm Company Act, shall be subject to the requirements of subdivision (c), and shall be accompanied by the “Notice of Cancellation” required by subdivision (c), except that the first paragraph of that notice shall be deleted and replaced with the following paragraph:
</html:p>
<html:p>You may cancel this transaction, without any penalty or obligation, within seven business days from the above date.</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
A home solicitation contract written pursuant to Section 7151.2 of the Business and Professions Code for the repair or restoration of residential premises damaged by a disaster that is subject to subdivision (c) of Section 1689.6, shall be written in the same language, e.g., Spanish, as principally used in the oral sales presentation. The contract, or an attachment to the contract that is subject to Section 7159 of the Business and Professions Code shall include, in immediate proximity to the space reserved for the buyer’s signature, the following statement in a size equal to at least 12-point boldface type, which shall be signed and dated by the buyer:
<html:br/>
</html:p>
<html:p>
<html:h1>“Seven-Day Right to Cancel</html:h1>
</html:p>
<html:p>You, the buyer, have the right to cancel this
contract within seven
business days. You may cancel by e-mailing, mailing, faxing, or delivering a written notice to the contractor at the contractor’s place of business by midnight of the seventh business day after you received a signed and dated copy of the contract that includes this notice. Include your name, your address, and the date you received the signed copy of the contract and this notice.</html:p>
<html:p>
If you cancel, the contractor must return to you anything you paid within 10 days of receiving the notice of cancellation. For your part, you must make available to the contractor at your residence, in substantially as good condition as you received it, any goods delivered to you under this contract or sale. Or, you may, if you wish, comply with the contractor’s instructions on how to return the goods at the contractor’s expense and risk. If you do make the goods available
to the contractor and the contractor does not pick them up within 20 days of the date of your notice of cancellation, you may keep them without any further obligation. If you fail to make the goods available to the contractor, or if you agree to return the goods to the contractor and fail to do so, then you remain liable for performance of all obligations under the contract.”
<html:br/>
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
The seller shall provide the buyer with a copy of the contract or offer to purchase and the attached notice of cancellation, and shall inform the buyer orally of the buyer’s right to cancel and the requirement that cancellation be in writing, at the time the home solicitation contract or offer is executed.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
Until the seller has complied with this section the buyer may cancel the home
solicitation contract or offer.
</html:p>
<html:p>
(h)
<html:span class="EnSpace"/>
“Contract or sale” as used in subdivision (c) means “home solicitation contract or offer” as defined by Section 1689.5.
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
The five-day right to cancel added by the act that added subparagraph (A) to paragraph (1) and subparagraph (B) to paragraph (4) of subdivision (a), and paragraph (2) to subdivision (c) applies to contracts, or offers to purchase conveyed, entered into, on or after January 1, 2021.
</html:p>
<html:p>
(j)
<html:span class="EnSpace"/>
The five-day and seven-day rights to cancel added by the act in the 2025–26 Regular Session of the Legislature that amended subdivisions (a) and (c) apply to contracts entered into, or offers to purchase conveyed, on or after January 1, 2026.
</html:p>
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</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_29AC1E12-48D2-41D3-82CA-015454EC5E4D">
<ns0:Num>SEC. 4.</ns0:Num>
<ns0:ActionLine action="IS_AMENDED" ns3:href="urn:caml:codes:CIV:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'3.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'PART'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'TITLE'%20and%20caml%3ANum%3D'5.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'CHAPTER'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'1689.13.'%5D)" ns3:label="fractionType: LAW_SECTION" ns3:type="locator">
Section 1689.13 of the
<ns0:DocName>Civil Code</ns0:DocName>
is amended to read:
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<ns0:Fragment>
<ns0:LawSection id="id_7D587B5A-1ED8-483E-921F-1F3778F83833">
<ns0:Num>1689.13.</ns0:Num>
<ns0:LawSectionVersion id="id_BDCE4ADC-9DE9-45E8-A71E-A736FF06F58F">
<ns0:Content>
<html:p>Sections 1689.5, 1689.6, 1689.7, 1689.10, 1689.12, and 1689.14 do not apply to a contract that meets all of the following requirements:</html:p>
<html:p>
(a)
<html:span class="EnSpace"/>
The contract is initiated by the buyer or the buyer’s agent or insurance representative.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
The contract is executed in connection with making of emergency or immediately necessary repairs that are necessary for the immediate protection of persons or real or personal property.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
The buyer gives the seller a separate statement that is dated and signed that describes the situation that requires immediate remedy, and
expressly acknowledges and waives the right to cancel the sale within the applicable time period.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The waiver of the five-day right to cancel added by the act that amended paragraph (1) shall apply to contracts entered into, or offers to purchase conveyed, on or after January 1, 2021.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
The waiver of the five-day and seven-day rights to cancel added by the act in the 2025–26 Regular Session of the Legislature that amended paragraph (1) applies to contracts entered into, or offers to purchase conveyed, on or after January 1, 2026.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_A97048DB-9AD2-4214-84E1-97D26AD494F5">
<ns0:Num>SEC. 5.</ns0:Num>
<ns0:ActionLine action="IS_ADDED" ns3:href="urn:caml:codes:CIV:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'3.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'PART'%20and%20caml%3ANum%3D'4.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'TITLE'%20and%20caml%3ANum%3D'1.87.'%5D)" ns3:label="fractionType: LAW_SPREAD||commencingWith: 1799.220" ns3:type="locator">
Title 1.87 (commencing with Section 1799.220) is added to Part 4 of Division 3 of the
<ns0:DocName>Civil Code</ns0:DocName>
, to read:
</ns0:ActionLine>
<ns0:Fragment>
<ns0:LawHeading id="id_E58B1D74-0079-458F-A05D-B940E9CD62BC" type="TITLE">
<ns0:Num>1.87.</ns0:Num>
<ns0:LawHeadingVersion id="id_770DDAB6-E019-4E4B-9ECB-B14FFD27B76A">
<ns0:LawHeadingText>Home Improvement Loans</ns0:LawHeadingText>
</ns0:LawHeadingVersion>
<ns0:LawSection id="id_95C3D2E6-3DF4-4C90-9E39-75B20CD16753">
<ns0:Num>1799.220.</ns0:Num>
<ns0:LawSectionVersion id="id_EC514CA5-228C-4CDE-BFCC-8CA0E3610167">
<ns0:Content>
<html:p>For purposes of this title:</html:p>
<html:p>
(a)
<html:span class="EnSpace"/>
“Consumer” has the same meaning as defined in Section 4052 of the Financial Code.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
“Consumer loan” has the same meaning as defined in Section 22203 of the Financial Code.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
“Dealer fee” means a charge associated with a home improvement loan that is treated by the lender as seller’s points pursuant to Section 1026.4 of Title 12 of the Code of Federal Regulations.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
“Home improvement” has the same meaning as defined in Section 7151 of the Business and
Professions Code.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
“Home improvement contract” has the same meaning as defined in Section 7159 of the Business and Professions Code.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
“Home improvement loan” means a consumer loan that
will be disbursed to a contractor in connection with a home solicitation contract to finance a home improvement.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
“Home improvement loan” does not include either of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
A PACE assessment.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
A mortgage loan that meets any of the following criteria:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
Insured by the Federal Housing Administration.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
Guaranteed or insured by the federal Department of Veterans Affairs.
</html:p>
<html:p>
(iii)
<html:span class="EnSpace"/>
Guaranteed or insured by the federal Department of Agriculture.
</html:p>
<html:p>
(iv)
<html:span class="EnSpace"/>
Purchased or securitized by the Federal Home Loan Mortgage Corporation.
</html:p>
<html:p>
(v)
<html:span class="EnSpace"/>
Purchased or securitized by the Federal National Mortgage Association.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
“Home solicitation contract” has the same meaning as defined in Section 1689.5.
</html:p>
<html:p>
(h)
<html:span class="EnSpace"/>
“PACE assessment” has the same meaning as defined in Section 22015 of the Financial Code.
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
“Solar energy system” has the same meaning as defined in Section 7151 of the Business and Professions Code.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
<ns0:LawSection id="id_4864BEDC-D426-4EBE-A0AB-1FC86B754AF6">
<ns0:Num>1799.221.</ns0:Num>
<ns0:LawSectionVersion id="id_818691E2-12DB-4132-A85B-0A8576A1199A">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
A consumer’s repayment obligations under a home improvement loan that finances a home improvement, excluding a solar energy system described in subdivision (b), and including, but not limited to, payments, fees, penalties, and interest, shall not commence until
either of the following has occurred:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
The lender has confirmed that all home improvements financed in whole or in part by the home improvement loan have been given final approval by all permitting agencies and received confirmation from the
consumer that the
improvements are operational.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
The lender has completed a reasonable investigation and determined that all home improvements are operational.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
For purposes of this paragraph, “a reasonable investigation” may include a review of video and photographic evidence that all home improvements funded by the loan are operational and fit for use, provided that the video and photographic evidence includes geolocation and time data.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
For
a home improvement that is a solar energy system, a consumer’s repayment obligations under a home improvement loan, including, but not limited to, payments, fees, penalties, and interest accrual, shall not commence until the lender confirms that the utility supplying electricity to the property has been connected to the solar energy system and has granted permission to operate the solar energy
system.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
A lender shall not report a home improvement loan to a credit reporting agency until the home improvement is operational and the consumer repayment obligations have commenced pursuant to this section.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
A consumer’s confirmation under this section that a home improvement is operational shall not stop the consumer from subsequently raising any claim or defense against the contractor or lender relating to the home improvement, nor shall the confirmation be treated as a prior inconsistent
statement under Section 1235 of the Evidence Code with respect to a defect or other problem with the home improvement or workmanship that the consumer did not actually discover until after the confirmation.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
<ns0:LawSection id="id_A1A9AB06-7AAA-44F0-8553-B775D6876B3D">
<ns0:Num>1799.222.</ns0:Num>
<ns0:LawSectionVersion id="id_0E17ED4F-3577-4B1D-9CDA-8A8439EE788B">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
Before a consumer executes a home improvement loan, the lender shall disclose to the consumer orally and in writing the dealer fee, if any, associated with the loan in compliance with this section.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
A lender shall complete and deliver to the consumer, or cause to be completed and delivered to the consumer, a printed copy of the disclosure set forth below, or a substantially similar printed document that displays the same information in a substantially similar format, in no smaller than 14-point type. The disclosure shall be signed by the consumer before a loan agreement may be executed.
</html:p>
<html:br/>
<html:p>“The amount of your loan may include a dealer fee that is not included as a finance charge for the purpose of calculating the annual percentage rate (APR) of the loan. This means that the true cost of this loan may be higher than indicated by the APR. If you seek financing from another lender that does not have a relationship with your contractor, the loan is unlikely to include a dealer
fee but may have a higher interest rate or other finance charges. For this reason, you are encouraged to shop around and compare the costs of different loans before deciding which to use for this project.</html:p>
<html:p>The dealer fee for this loan is $____. Your contractor may have opted to pay a dealer fee in order for your lender to extend credit to you on the terms reflected in your loan agreement. If your contractor added this amount or any portion of this amount to your home improvement contract, you will be required to pay that amount back. The dealer fee is
distinct from the payment or payments made by the lender to the contractor for their work on this project, which for this loan is $____.</html:p>
<html:p>Confirmation of Receipt:</html:p>
<html:p>Your signature below serves to show you have received this disclosure. Your signature on this form is not a contract to enter into a home improvement loan.</html:p>
<html:p>
<ns0:LabelledField>Consumer Signature</ns0:LabelledField>
<ns0:LabelledField>Date”</ns0:LabelledField>
</html:p>
<html:br/>
<html:p>
(2)
<html:span class="EnSpace"/>
Before delivering, or authorizing the delivery of, the printed disclosure set forth in this subdivision, the lender shall approve the form of disclosure that will be delivered to the consumer and provide the values of the
dealer fee and the amount of the payment or payments that will be made by the lender to the contractor that will be disclosed to the consumer.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
The printed disclosure may be a form copy with blanks for the dealer fee and the amount of the payment or payments that will be made by the lender to the contractor to be filled out by the person delivering the printed copy on behalf of the lender before delivering the form to the consumer. If a form copy is used, the lender shall receive oral confirmation from the consumer during the call required by subdivision (b) of Section 1799.224 that the form was completed and accurate and that the blanks were filled in before the form was delivered and consumer was asked to sign it.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
The lender shall obtain a copy, either physical or
digital, of the signed disclosure before executing the home improvement loan.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
The oral disclosure required by this section shall be provided in substantially the same form as the written disclosure set forth in paragraph (1) of subdivision (b).
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
<ns0:LawSection id="id_FA461489-69C0-4E05-9BA7-166C34D63C17">
<ns0:Num>1799.224.</ns0:Num>
<ns0:LawSectionVersion id="id_EEB07F2C-8F13-4C45-B2A8-F04C8239DD59">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
For purposes of this section:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
“Key terms” means the material terms of the home improvement loan, including, but not limited to, all of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
What home improvements are being financed.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The name of the contractor who will receive the loan proceeds.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
The loan term or period of time for repayment.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
The total cost of the loan.
</html:p>
<html:p>
(E)
<html:span class="EnSpace"/>
The monthly payment amounts and due dates.
</html:p>
<html:p>
(F)
<html:span class="EnSpace"/>
The finance charge.
</html:p>
<html:p>
(G)
<html:span class="EnSpace"/>
Whether the amount of monthly payments due will change during the term of the loan.
</html:p>
<html:p>
(H)
<html:span class="EnSpace"/>
The annual percentage rate of interest.
</html:p>
<html:p>
(I)
<html:span class="EnSpace"/>
How late fees may be incurred.
</html:p>
<html:p>
(J)
<html:span class="EnSpace"/>
How payments more than the minimum payment will be applied.
</html:p>
<html:p>
(K)
<html:span class="EnSpace"/>
Whether there are any prepayment penalties.
</html:p>
<html:p>
(L)
<html:span class="EnSpace"/>
When the first payment is due.
</html:p>
<html:p>
(M)
<html:span class="EnSpace"/>
Any dealer fees.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
“Their own interpreter” means a person who represents that they meet all of the following conditions:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
The person is not a minor
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The person is able to speak fluently and read with full understanding both the English language and the language in which the consumer prefers to communicate, provided that the language is specified in Section 1632 of the Civil Code.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
The person is not employed by, and whose services are not made available through, the lender or the contractor.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
Before a consumer executes a contract for a home improvement loan to pay for a home improvement
that is being financed by a home improvement loan, the lender shall do both of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
Obtain a copy of the home improvement contract for the home improvement that is being financed by the home improvement loan.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Complete and document a telephone, video, or digital call with the consumer, or an authorized representative of the consumer to do all of the following:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
Receive oral confirmation that the consumer has received a copy of the home improvement loan contract, with the key
terms completed, the financing estimate and disclosure form required under the federal Truth in Lending Act, and the right-to-cancel form.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
Review the key terms of the home improvement loan contract, in plain language, with, and convey all of the information required by paragraph (3) to, the consumer on the call or to a verified authorized representative of the consumer on the call, and receive oral confirmation that the consumer or their representative understands the key terms of the loan.
</html:p>
<html:p>
(iii)
<html:span class="EnSpace"/>
Provide the consumer, or an authorized representative of the consumer, the opportunity to ask any questions about the loan or terms of the loan, and, once all questions have been answered, receive oral confirmation that the consumer understands the terms of the home improvement loan contract.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
At the commencement of the oral confirmation required by subparagraph (B) of paragraph (1), the lender shall ask if the consumer on the call would prefer to communicate during the oral confirmation primarily in a language other than English that is specified in Section 1632. If the preferred language
is supported by the lender, the oral confirmation shall be given in that primary language, except where the consumer on the call chooses to communicate through their own interpreter. If the preferred language is not supported and an interpreter is not chosen by the consumer on the call, the home improvement loan contract shall not proceed.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
After determining the consumer’s preferred language, the lender shall inform the consumer that they have the right to include anyone else on the call, except that the contractor or contractor’s salesperson shall not be present during or participate in the call. The lender shall ask the consumer whether they wish to have anyone else participate in the call and confirm with the consumer that the contractor or contractor’s salesperson
is not present. The lender shall terminate the call, and the home improvement loan contract shall not proceed, if the lender learns that the contractor or salesperson, or both, are present, or that an unauthorized third party is attempting to participate in the call.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
The oral confirmation required pursuant to subparagraph (B) of paragraph (1) shall include, but need not be limited to, all of the following information:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
A statement that the consumer should review the home improvement loan and financing estimate and disclosure form with all other owners of the property.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
An explanation of the home improvements being installed that are being financed by the home improvement loan,
including, but not limited to, the description of the home improvements as described in the home improvement contract.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
An explanation of the key terms of the home improvement loan.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
Confirmation of the consumer’s gross monthly household income and ability to pay the monthly payment amount and total
cost even if any estimated cost savings are not realized.
</html:p>
<html:p>
(E)
<html:span class="EnSpace"/>
Confirmation that the consumer understands that any estimates of cost savings from the home improvements are not guaranteed and may be based on estimates that differ from actual results, and that the consumer is obligated to repay the loan regardless of whether any estimated cost savings are realized.
</html:p>
<html:p>
(F)
<html:span class="EnSpace"/>
Confirmation that the consumer understands that they should consult a tax professional to determine the consumer may qualify for any tax benefits related to the home improvement project and that the consumer should not rely on any representations made by the contractor, contractor’s salesperson, or lender in determining the value of any tax benefits for which the consumer may qualify.
</html:p>
<html:p>
(G)
<html:span class="EnSpace"/>
Disclosure of whether the property will be subject to a financing statement filing requirement, as specified in Section 9501 of the Commercial Code, during the term of the loan contract and confirmation that the consumer understands that the obligations under the loan contract may be required to be paid in full before the property owner sells or refinances the property.
</html:p>
<html:p>
(H)
<html:span class="EnSpace"/>
Confirmation of the identity of the consumer, including their email address, and if the lender will send communications to the borrower through email, confirmation that the consumer is able to access email.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
The lender shall maintain a recording of the oral confirmation required by subparagraph (B) of paragraph (1) for at least five years
after the loan term ends or the last date the loan is active, whichever is earlier, and shall make it available to the consumer upon request.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
If the oral confirmation required by this section was conducted primarily in a language other than English that is specified in Section 1632, the lender shall deliver in writing to the consumer, in the language used during the oral
confirmation, the disclosures and contract or agreement required by law, including, but not limited to, all of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
The home improvement loan contract.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The right-to-cancel form.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
The financing estimate and disclosure form required under the federal Truth in Lending Act.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
If the oral confirmation required by this section was conducted primarily in any language other than English and that is specified in Section 1632, all subsequent communications, whether written or oral, shall be
conducted in the manner described in subparagraph (B) of paragraph (2) of subdivision (b).
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
<ns0:LawSection id="id_07C097DB-11E4-4C4B-9261-614D40A34F4B">
<ns0:Num>1799.225.</ns0:Num>
<ns0:LawSectionVersion id="id_00C840BD-984E-4B8D-BFEC-549D0E90A412">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
A lender that offers or provides a home improvement loan shall make available to the consumer, upon request, information in the control or possession of the lender concerning the home improvement loan that was provided to the consumer to finance the home improvement contract, as set forth in this section.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
A lender shall comply with the requirements of this section for any written request for information from a consumer or their authorized representative that includes the name of the consumer, the project subject to the financing agreement, information that enables the lender to identify the consumer’s account, and that states the information the
consumer is requesting.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
A lender shall provide to the consumer or their authorized representative, upon written request, any of the following documentation:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
The financing application.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Financing agreement and disclosures, including all certificates, disclosures, and contracts associated with the home improvement loan, and including any signed or initialed copies.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
A copy of the home improvement contract for the financed work.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Completion certificates or other documentation relied upon to evidence that performance of the financed home improvement was completed or satisfactorily
concluded, including any signed copies.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
Documentation of any electronic signatures obtained in connection with the home improvement loan, including electronic certificates, electronic signature envelopes, or audit trails.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
Documentation of all payments to the contractor. The requirement described in this paragraph does not prohibit a lender from redacting any information that is confidential or of a sensitive nature, including, but not limited to, account or routing numbers.
</html:p>
<html:p>
(7)
<html:span class="EnSpace"/>
The transaction history between the lender and the consumer.
</html:p>
<html:p>
(8)
<html:span class="EnSpace"/>
Home
improvement loan disclosures.
</html:p>
<html:p>
(9)
<html:span class="EnSpace"/>
An accounting from the date of original transaction to the present.
</html:p>
<html:p>
(10)
<html:span class="EnSpace"/>
If secured by a financing statement, as described in Section 9501 of the Commercial Code, a copy of the financing statement.
</html:p>
<html:p>
(11)
<html:span class="EnSpace"/>
Recordings of all oral confirmation calls with the consumer or their authorized representative or representatives.
</html:p>
<html:p>
(12)
<html:span class="EnSpace"/>
Documentation of any investigation performed in compliance with Section 1799.221.
</html:p>
<html:p>
(13)
<html:span class="EnSpace"/>
Documentation of any dealer fees.
</html:p>
<html:p>
(14)
<html:span class="EnSpace"/>
Documentation of the lender’s compliance with
Section 1799.222.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
A lender shall maintain each of the records specified in subdivision (c) relating to any transaction for five years from the end of the loan term or the last date the loan is active, whichever is earlier.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
A lender, by written notice provided to a consumer, may establish an address that a consumer must use to request information in accordance with the procedures in this section.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
No later than 30 business days after the lender receives the request for information, the lender shall do one of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Provide the consumer with the requested information and contact information, including a telephone number, for further assistance in writing.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Conduct a reasonable search for the requested information and provide the consumer with a written notification that states that the lender has determined that the requested information is not available to the lender. That notification shall also identify the basis for the lender’s determination, and provide contact information, including a telephone number, for further assistance.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
A lender, as a condition of responding to an information request, shall not charge a fee, or require a consumer to make any payment that may be owed on the consumer’s account, or impose any
other requirement.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
</ns0:LawHeading>
</ns0:Fragment>
</ns0:BillSection>
</ns0:Bill>
</ns0:MeasureDoc>
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