Senate Bill 2641 (Torres – 1990)
Chapter 1537, Statutes of 1990, SB 2641
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Sections 1695.15, 1695.16, 1695.17, 2945.9, 2945.10 and 2945.11 were added to the Civil Code in 1990 following legislative approval of Senate Bill 2641. (See Exhibit #1f) Senate Bill 2641 was introduced by Senator Art Torres on March 1, 1990. (See Exhibit #1a) Background information sheets from the Senate and Assembly Committees on Judiciary noted the source of the bill to be the Legal Aid Foundation. (See Exhibits #4, document SP-18 and #8, document AP-6) The Western Center on Law and Poverty was stated to be the sponsor of the measure. (Id.; see also Exhibits #3, #5, and #12, document PE-5)
Senate Bill 2641 was assigned to the Senate and Assembly Committees on Judiciary where policy issues raised by the bill were considered. (See Exhibits #3 and #7) The measure was amended by the Senate on May 7, 1990 and by the Assembly on August 13, 21, and 27, 1990. (See Exhibits #1b through #1e) After approval by the Legislature, the measure was forwarded to the Governor on September 12, 1990. (See Exhibit #2) Governor George Deukmejian signed Senate Bill 2641 on September 29, 1990, and it was recorded by the Secretary of State on September 30, 1990 as Chapter 1537 of the Statutes of 1990. (See Exhibits #1f and #2)
According to the Unfinished Business analysis prepared by the Office of Senate Floor Analyses:
Existing law contains various provisions governing the sale of residences in foreclosure to foreclosure consultants, as defined, and to equity purchasers, as defined.
This bill would provide that any representations made by any individual or group of individuals, as defined, to the equity seller, concerning an equity purchase or to the owners concerning a residence in foreclosure would be binding upon the equity purchaser or foreclosure consultant respectively, and the equity purchaser or foreclosure consultant would be liable for all civil damages caused by the representations or by their conduct. Moreover, the equity seller or the owner would be entitled to bring a civil action, as specified, regarding the liability of the equity purchaser or the foreclosure consultant. This bill would define “any individual” to mean an agent or employee, or both an agent and employee of the equity purchaser or foreclosure consultant, as appropriate, who was acting within the course and scope of the agency or employment or agency and employment, whichever is appropriate, and with the full knowledge and consent of the equity purchaser or foreclosure consultant. The bill also would require any such individual to provide certain proof of licensure and bonding, as specified.
The bill would provide that any provision in a contract, entered into on or after January 1, 1991, that attempts or purports to limit the liability of the equity purchaser or the foreclosure consultant would be void and, at the option of the equity seller or owner the equity purchaser contract or the foreclosure sale contract, respectively, would be void only upon grounds as exist for the revocation of any contract. This bill would specify that an order summarily adjudicating civil liability or agency would not constitute a finding of criminal liability for the purpose of any criminal prosecution brought under these provisions.
The purpose of this bill is to provide additional protections for the vulnerable homeowners.
(See Exhibit #11, pages 1 and 2)