California real estate disclosure laws California Real Estate Disclosures | Page 68

before entering into an agreement to purchase. The subdivider is required to
keep the receipt for three years.
If the subdivision interest being offered is in a common interest development
(a planned development, stock cooperative, condominium, or community
apartment project), the subdivider or his/her broker(s)/agent(s) must give the
buyer a statement called, “Common Interest Development General
Information.” This statement, contained in the public report, explains what
ownership in a common interest development means with regard to:
mandatory membership in the association; rights and remedies under the
governing documents; payment of assessments; ownership and use of the
recreational facilities; the responsibilities and powers of the governing body;
voting rights; and other rights inuring to the members/owners.
(CAL. BUS. & PROF. § 11000, et. seq.; CAL. CIV. § 1350 et. seq.)

B. Disclosure of the Right to Rescind
Purchasers in two types of subdivisions have an unqualified right of
rescission as follows:
1. Timeshare buyers have a right to rescind the purchase within seven
calendar days after receipt of the Public Report or the date of signing the
purchase contract, whichever is later.
2. Undivided interest buyers have a right to rescind the purchase by
midnight of the third calendar day following the day the purchaser
executed the offer to purchase.
(CAL. BUS. & PROF. §§ 11000.2, 11238)
The owner, subdivider, or broker(s)/agent(s) of the owner or subdivider must
conspicuously disclose to all prospective buyers the right of rescission and
give each buyer a rescission form for the possible exercise of this right.
Statute and Regulations specify the exact language, type, and size of print to
be used. By following the instructions on the rescission form, a person who
has made an offer to purchase may cancel/rescind without giving any reason
or incurring any penalty.
(CAL. BUS. & PROF. §§ 11238, 11239; COMMISSIONER’S REGULATIONS
2792.30, 2792.31)

C. Disclosure and Notice of Blanket Encumbrance
A blanket encumbrance is a deed of trust, mortgage, or other lien or
encumbrance (excepting taxes or assessments levied by public authority)
which affects more than one lot or unit in a subdivision. Section 11013.2 of
the Business and Professions Code mandates protection of a buyer’s funds,
unless the lot or unit can be unconditionally released from the blanket

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