California real estate disclosure laws California Real Estate Disclosures | Page 50
other design professionals of the tentative tract map, grading and site
plans, and the design and location of roads and utilities.
•
The transactional documents are to include a detailed description of the
actions that may be taken in the event of a failure to complete the
project, whether the failure is due to default, insufficiency of funds, or
other causes; and
•
The entire amount of the construction, development, or rehabilitation
loan cannot exceed 2.5 million dollars.
The aforementioned amendments also expand the ability of a real estate
broker to arrange transactions secured by more than one parcel of real
property. When the loan being arranged by the real estate broker is intended
to be secured by more than one parcel of real property, the multi-lender
statute (as amended) requires safeguards be established and that the lenders
or note purchasers receive disclosures regarding each of same as follows:
•
The intended security properties are to be separately appraised and a
current market value is to be established for each;
•
Each intended security property is to be assigned a portion of the
principal of the note or interest therein which may not exceed the
percentage of the current market value statutorily established for the
type of security property involved;
•
The address, description and estimated current market value of each
intended security property must be disclosed to each lender or note
purchaser;
•
The loan-to-value percentage for each intended security property, after
the loan amount is proportioned, must be established and disclosed to
each lender or note purchaser;
•
The amount of available equity (the total equity as well as the equity
allocated by each intended security property) after the principal amount
has been proportioned to each intended security property must be
established and disclosed to each lender or note purchaser;
•
The use of the revised Lender/Purchaser Disclosure Statement forms
promulgated by the Department of Real Estate are now required; and
•
The real estate broker is to disclose any other information that may be
material or essential to avoid misleading the lenders or note purchasers,
i.e., all material loan terms and investment risks are to be disclosed.
Finally, in multi-lender transactions, the real estate broker must include a
disclosure within each loan file describing whether the exemption from
qualification and registration or the permit issued pursuant to qualification
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