California real estate disclosure laws California Real Estate Disclosures | Page 65

consumers from the misuse of their credit standing, financial worthiness, and
their identity, the California legislature has added to the Civil Code two
procedures. The first is known as a “Security Alert” and is authorized by
Civil Code Section 1785.11.1. This procedure allows a consumer to make a
request in writing or by telephone to a consumer credit reporting agency to
include an alert in the credit file to be included in any subsequent report
issued on that consumer. Each recipient of a credit report issued on the
consumer following the imposition in the file of the “Security Alert” will
notify the recipients of the reports that the consumer’s identity may have
been used without the consumer’s consent to fraudulently obtain goods and
services in the consumer’s name.
The second protection enacted by the legislature pursuant to Civil Code
Section 1785.11.2 is a “Security Freeze” which may be placed on a
consumer’s credit report. The “Security Freeze” would prohibit the release
to third parties of a credit report or other information about the consumer. A
consumer may elect to place a “Security Freeze” on his or her credit report
by making a request in writing by certified mail to a credit reporting agency,
or directly to one or more of the credit repositories.
The result of the foregoing is a notice placed in a consumer’s credit report
that subject to certain exceptions would prohibit a consumer credit reporting
agency from releasing a consumer’s credit report or any information from
the report without the express authorization of the consumer. Upon request,
the credit repositories previously identified in this section will issue to the
consumer a personal identification number (PIN) which must be used by the
consumer when an authorized credit request has been made. The use of the
PIN number will allow a credit reporting agency to lawfully issue a credit
report, or information from the report, to a third party who may extending
credit or making a loan to or arranging the loan for the consumer.
(CAL. CIV. § 1785.1, et. seq.)

P. Disclosure Required by the Housing Financial
Discrimination Act of l977 (Holden Act)
Federal policy is to ensure fair housing by prohibiting discrimination based
on race, color, religion, sex, national origin, marital status, age, or physical
disabilities in connection with the sale, rental, construction, or financing of
housing. To supplement federal legislation, state laws have been enacted to
forbid the discriminatory practice known as “red-lining” that results in
blanket refusals by some lenders to make loans in neighborhoods of
declining property values.
The Holden Act prohibits the consideration of race, color, religion, sex,
marital status, national origin, or ancestry in lending for the purchase,

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