California real estate disclosure laws California Real Estate Disclosures | Page 69

encumbrance. If there is a blanket encumbrance and the project is not subject
to Section 11013.2, a prospective buyer, or lessee for a period of more than
five years, must receive and sign the following notice prior to the sale, or
lease:
BUYER/LESSEE IS AWARE OF THE FACT THAT THE LOT, PARCEL, OR
UNIT WHICH HE OR SHE IS PROPOSING TO PURCHASE OR LEASE IS
SUBJECT TO A DEED OF TRUST, MORTGAGE, OR OTHER LIEN KNOWN AS
A “BLANKET ENCUMBRANCE”.
IF BUYER/LESSEE PURCHASES OR LEASES THIS LOT, PARCEL, OR UNIT,
HE OR SHE COULD LOSE THAT INTEREST THROUGH FORECLOSURE OF
THE BLANKET ENCUMBRANCE OR OTHER LEGAL PROCESS EVEN
THOUGH BUYER/LESSEE IS NOT DELINQUENT IN HIS OR HER PAYMENTS
OR OTHER OBLIGATIONS UNDER THE MORTGAGE, DEED OF TRUST, OR
LEASE.
________________________
Date

__________________________________
Signature of Buyer or Lessee

When the prospective buyer or lessee receives and signs the foregoing
notice, the buyer or lessee acknowledges awareness of the blanket
encumbrance and the possible consequences thereof. This may include the
inability of the builder/developer to use or retain earnest money deposits
advanced by the prospective purchaser prior to the release of the blanket
encumbrance from the parcel being purchased.
(CAL. CIV. § 1133)

D. Delivery of Governing Documents and Disclosures to
Prospective Purchaser in a Common Interest
Development
Any person offering to sell or lease lots or units in a common interest
development (a community apartment project, condominium project,
planned development, or stock cooperative) which requires a public report
prior to the offering must make available the following documents to the
prospective buyer or lessee before the execution of an offer to purchase or
lease:
•

The declaration of covenants, conditions, and restrictions;

•

The articles of incorporation and bylaws for the association;

•

Any other instrument which establishes or defines the common, mutual,
and reciprocal rights and responsibilities of the owners or lessees of
interests in the development;

•

The current budget including estimated reserves and related financial
statements of the association; and

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