Article 12.2 - Penalties

California Civil Code — §§ 1812.6-1812.9

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Sections (69)

Added by Stats. 1959, Ch. 201.

Any person who shall willfully violate any provision of this chapter shall be guilty of a misdemeanor.

Amended by Stats. 1988, Ch. 1043, Sec. 12.

Any contract for dance studio lessons and other services entered into in reliance upon any willful and false, fraudulent, or misleading information, representation, notice, or advertisement of the seller shall be void and unenforceable.

Amended by Stats. 2002, Ch. 784, Sec. 19. Effective January 1, 2003.

(a)Every auctioneer and auction company shall maintain a bond issued by a surety company admitted to do business in this state. The principal sum of the bond shall be twenty thousand dollars ($20,000). A copy of the bond shall be filed with the Secretary of State.
(b)The bond required by this section shall be in favor of, and payable to, the people of the State of California and shall be for the benefit of any person or persons damaged by any fraud, dishonesty,

misstatement, misrepresentation, deceit, unlawful acts or omissions, or failure to provide the services of the auctioneer or auction company in performance of the auction by the auctioneer or auction company or its agents, representatives, or employees while acting within the scope of their employment.

(c)(1) No auctioneer or auction company shall conduct any business without having a current surety bond in the amount prescribed by this section and without filing a copy of the bond with the Secretary of State.
(2)Thirty days prior to the cancellation or termination of any surety bond required by this section, the surety shall send a written notice of that cancellation or termination to both the auctioneer or auction company and the Secretary of State, identifying the bond and the date of cancellation or termination.
(3)If any auctioneer or auction company fails to obtain a new bond and file a copy of that bond with the Secretary of State by the effective date of the cancellation or termination of the former bond, the auctioneer or auction company shall cease to conduct any business unless and until that time as a new surety bond is obtained and a copy of that bond is filed with the Secretary of State.
(d)A deposit may be made in lieu of a bond as set forth in Section 995.710 of the Code of Civil Procedure. When a deposit is made in lieu of the bond, the person asserting the claim against the deposit shall establish the claim by furnishing evidence to the Secretary of State of a money judgment entered by a court together with evidence that the claimant is a person described in subdivision (b).
(e)When a claimant has established

the claim with the Secretary of State, the Secretary of State shall review and approve the claim and enter the date of approval on the claim. The claim shall be designated an “approved claim.”

(f)When the first claim against a particular deposit has been approved, it shall not be paid until the expiration of a period of 240 days after the date of its approval by the Secretary of State. Subsequent claims that are approved by the Secretary of State within the same 240-day period shall similarly not be paid until the expiration of the 240-day period. Upon expiration of the 240-day period, the Secretary of State shall pay all approved claims from that 240-day period in full unless the deposit is insufficient, in which case each approved claim shall be paid a pro rata share of the deposit.
(g)When the Secretary of State approves the first claim against a particular deposit after the

expiration of a 240-day period, the date of approval of that claim shall begin a new 240-day period to which subdivision (f) shall apply with respect to any amount remaining in the deposit.

(h)After a deposit is exhausted, no further claims shall be paid by the Secretary of State. Claimants who have had their claims paid in full or in part pursuant to subdivision (f) or (g) shall not be required to return funds received from the deposit for the benefit of other claimants.
(i)When a deposit has been made in lieu of a bond, the amount of the deposit shall not be subject to attachment, garnishment, or execution with respect to an action or judgment against the auctioneer or auction company, other than as to that amount that is no longer needed or required for the purpose of this section that otherwise would be returned to the auctioneer or auction company by the Secretary of

State.

(j)The Secretary of State shall retain a cash deposit for two years from the date the Secretary of State receives written notification from the assignor of the deposit that the assignor has ceased to engage in the business of an auctioneer or auction company or has filed a bond pursuant to subdivision (a), provided that there are no outstanding claims against the deposit. Written notification to the Secretary of State shall include all of the following:
(1)name, address, and telephone number of the assignor; (2) name, address, and telephone number of the bank at which the deposit is located; (3) account number of the deposit; and (4) a statement whether the assignor is ceasing to engage in the business of an auctioneer or auction company or has filed a bond with the Secretary of State. The Secretary of State shall forward an acknowledgment of receipt of the written notice to the assignor at the address indicated in the notice,

specifying the date of receipt of the written notice and anticipated date of release of the deposit, provided there are no outstanding claims against the deposit.

(k)A judge of a superior court may order the return of the deposit prior to the expiration of two years upon evidence satisfactory to the judge that there are no outstanding claims against the deposit or order the Secretary of State to retain the deposit for a specified period beyond the two years pursuant to subdivision (j) to resolve outstanding claims against the deposit.
(l)If an auctioneer or auction company fails to perform any of the duties specifically imposed upon him or her pursuant to this title, any person may maintain an action for enforcement of those duties or to recover a civil penalty in the amount of one thousand dollars ($1,000), or for both enforcement and recovery.
(m)In any action to enforce these duties or to recover civil penalties, or for both enforcement and recovery, the prevailing plaintiff shall be entitled to reasonable attorney’s fees and costs, in addition to the civil penalties provided under subdivision (l).
(n)Notwithstanding the repeal of Chapter 3.7 (commencing with Section 5700) of Division 3 of the Business and Professions Code by the act adding this chapter, any cash security in lieu of the surety bond formerly required and authorized by former Chapter 3.7 (commencing with Section 5700) of Division 3 of the Business and Professions Code, shall be transferred to, and maintained by, the Secretary of State.
(o)The Secretary of State shall charge and collect a filing fee not to exceed the cost of filing the bond or deposit filed in lieu of a bond as set

forth in Section 995.710 of the Code of Civil Procedure.

(p)The Secretary of State shall enforce the provisions of this chapter that govern the filing and maintenance of bonds and deposits in lieu of bonds.

Amended by Stats. 2004, Ch. 194, Sec. 1. Effective January 1, 2005.

(a)“Advertisement” means any of the following:
(1)Any written or printed communication for the purpose of soliciting, describing, or offering to act as an auctioneer or provide auction company services, including any brochure, pamphlet, newspaper, periodical, or publication.
(2)A telephone or other directory listing caused or permitted by an auctioneer or auction company to be published that indicates the

offer to practice auctioneering or auction company services.

(3)A radio, television, or similar airwave transmission that solicits or offers the practice of auctioneering or auction company services.
(b)“Auction” means a sale transaction conducted by means of oral or written exchanges, which include exchanges made in person or through electronic media, between an auctioneer and the members of his or her audience, which exchanges consist of a series of invitations for offers for the purchase of goods made by the auctioneer and offers to purchase made by members of the audience and culminate in the acceptance by the auctioneer of the highest or most favorable offer made by a member of the participating audience. However, auction does not include either of the following:
(1)A wholesale motor vehicle auction subject

to regulation by the Department of Motor Vehicles.

(2)A sale of real estate or a sale in any sequence of real estate with personal property or fixtures or both in a unified sale pursuant to subparagraph (B) of paragraph (1) of subdivision (a) of Section 9604 of the Commercial Code.
(c)“Auction company” means any person who arranges, manages, sponsors, advertises, accounts for the proceeds of, or carries out auction sales at locations, including, but not limited to, any fixed location, including an auction barn, gallery place of business, sale barn, sale yard, sale pavilion, and the contiguous surroundings of each.
(d)“Auctioneer” means any individual who is engaged in, or who by advertising or otherwise holds himself or herself out as being available to engage in, the calling for, the recognition of, and the

acceptance of, offers for the purchase of goods at an auction.

(e)“Employee” means an individual who works for an employer, is listed on the employer’s payroll records, and is under the employer’s control.
(f)“Employer” means a person who employs an individual for wages or salary, lists the individual on the person’s payroll records, and withholds legally required deductions and contributions.
(g)“Goods” means any goods, wares, chattels, merchandise, or other personal property, including domestic animals and farm products.
(h)“Person” means an individual, corporation, partnership, trust, including a business trust, firm, association, organization, or any other form of business enterprise.

Added by Stats. 1993, Ch. 1170, Sec. 2. Effective October 11, 1993.

The superior court for the county in which any person has engaged or is about to engage in any act that constitutes a violation of this title may, upon a petition filed by any person, issue an injunction or other appropriate order restraining the violative conduct. Proceedings under this section shall be governed by Chapter 3 (commencing with Section 525) of Title 7 of Part 2 of the Code of Civil Procedure, except that no undertaking shall be required.

Added by Stats. 1993, Ch. 1170, Sec. 2. Effective October 11, 1993.

(a)The superior court for the county in which any person has engaged in any act that constitutes a violation of this title may, upon a petition filed by any person, order the person who committed the violation to make restitution to any person injured as a result of the violation.
(b)The court may order any person against whom an injunction or restraining order pursuant to subdivision (a), or an order requiring restitution pursuant to subdivision (b), is directed, to

reimburse the petitioner for expenses incurred in the investigation related to its petition.

(c)The remedies set forth in this section are in addition to, and not a limitation on, the authority provided for in any other section of this code.

Added by Stats. 1993, Ch. 1170, Sec. 2. Effective October 11, 1993.

Except as otherwise provided in this title, any person who violates any provision of this title is guilty of a misdemeanor, which offense is punishable by a fine not exceeding one thousand dollars ($1,000), or by imprisonment in a county jail for not more than one year, or by both that fine and imprisonment. In addition, upon a conviction of any violation of this chapter, or of any crime related to the conduct of an auctioneer, the court may issue an injunction and prohibit the convicted person from acting as an auctioneer or an auction company in this state,

in which case the court shall inform the Secretary of State of that action.

Added by Stats. 1993, Ch. 1170, Sec. 2. Effective October 11, 1993.

In conducting the business of auctioneering, each auctioneer and auction company, and the company’s owners, partners, officers, agents, and employees, shall do all of the following:

(a)Follow all lawful requests of the owner or consignor of the goods being sold at auction with regard to the sale of those goods.
(b)Perform his or her duties so that the highest or most favorable offer made by a member of his or her audience is

accepted, except to the extent that any item or sale is offered with reserve or subject to confirmation.

(c)Truthfully represent the goods to be auctioned.
(d)Otherwise perform his or her duties in accordance with the laws of this state.

Added by Stats. 1993, Ch. 1170, Sec. 2. Effective October 11, 1993.

Every auctioneer who operates his or her own auction company as a sole proprietor, and every auction company, together with its owners, partners, and officers, that employs an auctioneer, shall be responsible for all violations committed by the auctioneer or by any company employee in the conduct of auction business. An auctioneer who is employed by an auctioneer or auction company shall be responsible for all violations committed by him or her in the conduct of auction business.

It is a violation of this title for

any auctioneer or auction company, or the company’s owners, partners, and officers, to direct or knowingly permit any violation of this title by any auctioneer employed by or under contract with that auctioneer or auction company, or by any owner, partner, officer, agent, or employee of the auction company.

Added by renumbering Section 1861.607 by Stats. 1997, Ch. 17, Sec. 16. Effective January 1, 1998.

Every auction company and auctioneer shall do all of the following:

(a)Disclose his or her name, trade or business name, telephone number, and bond number in all advertising of auctions. A first violation of this subdivision is an infraction subject to a fine of fifty dollars ($50); a second violation is subject to a fine of seventy-five dollars ($75); and a third or subsequent violation is subject to a

fine of one hundred dollars ($100). This section shall not apply to business cards, business stationery, or to any advertisement that does not specify an auction date.

(b)Post a sign, the dimensions of which shall be at least 18 inches by 24 inches, at the main entrance to each auction, stating that the auction is being conducted in compliance with Section 2328 of the Commercial Code, Section 535 of the Penal Code, and the provisions of the California Civil Code. A first violation of this subdivision is an infraction subject to a fine of fifty dollars ($50); a second violation is subject to a fine of seventy-five dollars ($75); and a third or subsequent violation is subject to a fine of one hundred dollars ($100).
(c)Post or distribute to the audience the terms, conditions, restrictions, and procedures whereby goods will be sold at the auction, and announce any changes to those

terms, conditions, restrictions, and procedures prior to the beginning of the auction sale. A first violation of this subdivision is an infraction subject to a fine of fifty dollars ($50); a second violation is subject to a fine of one hundred dollars ($100); and a third or subsequent violation is subject to a fine of two hundred fifty dollars ($250).

(d)Notify the Secretary of State of any change in address of record within 30 days of the change. A violation of this subdivision is an infraction subject to a fine of fifty dollars ($50).
(e)Notify the Secretary of State of any change in the officers of a corporate license within 30 days of the change. A violation of this subdivision is an infraction subject to a fine of fifty dollars ($50).
(f)Notify the Secretary of State of any change in the business or trade

name of the auctioneer or auction company within 30 days of the change. A violation of this subdivision is an infraction subject to a fine of fifty dollars ($50).

(g)Keep and maintain, at the auctioneer’s or auction company’s address of record, complete and correct records and accounts pertaining to the auctioneer’s or auction company’s activity for a period of not less than two years. The records shall include the name and address of the owner or consignor and of any buyer of goods at any auction sale engaged in or conducted by the auctioneer or auction company, a description of the goods, the terms and conditions of the acceptance and sale of the goods, all written contracts with owners and consignors, and accounts of all moneys received and paid out, whether on the auctioneer’s or auction company’s own behalf or as agent, as a result of those activities. A first violation of this subdivision is a misdemeanor subject to a fine of five

hundred dollars ($500); and a second or subsequent violation is subject to a fine of one thousand dollars ($1,000).

(h)Within 30 working days after the sale transaction, provide, or cause to be provided, an account to the owner or consignor of all goods that are the subject of an auction engaged in or conducted by the auctioneer or auction company. A first violation of this subdivision is a misdemeanor subject to a fine of five hundred dollars ($500); and a second or subsequent violation is subject to a fine of one thousand dollars ($1,000).
(i)Within 30 working days after a sale transaction of goods, pay or cause to be paid all moneys and proceeds due to the owner or the consignor of all goods that were the subject of an auction engaged in or conducted by the auctioneer or auction company, unless delay is compelled by legal proceedings or the inability of the auctioneer or

auction company, through no fault of his or her own, to transfer title to the goods or to comply with any provision of this chapter, the Commercial Code, or the Code of Civil Procedure, or with any other applicable provision of law. A first violation of this subdivision is a misdemeanor subject to a fine of one thousand dollars ($1,000); a second violation is subject to a fine of one thousand five hundred dollars ($1,500); and a third or subsequent violation is subject to a fine of two thousand dollars ($2,000).

(j)Maintain the funds of all owners, consignors, buyers, and other clients and customers separate from his or her personal funds and accounts. A violation of this subdivision is an infraction subject to a fine of two hundred fifty dollars ($250).
(k)Immediately prior to offering any item for sale, disclose to the audience the existence and amount of any liens or other

encumbrances on the item, unless the item is sold as free and clear. For the purposes of this subdivision, an item is “free and clear” if all liens and encumbrances on the item are to be paid prior to the transfer of title. A violation of this subdivision is an infraction subject to a fine of two hundred fifty dollars ($250) in addition to the requirement that the buyer be refunded, upon demand, the amount paid for any item that is the subject of the violation.

(l)Within two working days after an auction sale, return the blank check or deposit of each buyer who purchased no goods at the sale. A first violation of this subdivision is an infraction subject to a fine of one hundred dollars ($100); and a second or subsequent violation is subject to a fine of two hundred fifty dollars ($250).
(m)Within 30 working days of any auction sale, refund that portion of the deposit of

each buyer that exceeds the cost of the goods purchased, unless delay is compelled by legal proceedings or the inability of the auctioneer or auction company, through no fault of his or her own, to transfer title to the goods or to comply with any provision of this chapter, the Commercial Code, or the Code of Civil Procedure, or with other applicable provisions of law, or unless the buyer violated the terms of a written agreement that he or she take possession of purchased goods within a specified period of time. A first violation of this subdivision is an infraction subject to a fine of one hundred dollars ($100); and a second or subsequent violation is subject to a fine of two hundred fifty dollars ($250).

Added by renumbering Section 1861.608 by Stats. 1997, Ch. 17, Sec. 17. Effective January 1, 1998.

In addition to other requirements and prohibitions of this title, it is a violation of this title for any person to do any of the following:

(a)Fail to comply with any provision of this code, or with any provision of the Vehicle Code, the Commercial Code, any regulation of the Secretary of State, the Code of Civil Procedure, the Penal Code, or any law administered by the State Board of Equalization,

relating to the auctioneering business, including, but not limited to, sales and the transfer of title of goods.

(b)Aid or abet the activity of any other person that violates any provision of this title. A violation of this subdivision is a misdemeanor subject to a fine of one thousand dollars ($1,000).
(c)Place or use any misleading or untruthful advertising or statements or make any substantial misrepresentation in conducting auctioneering business. A first violation of this subdivision is a misdemeanor subject to a fine of five hundred dollars ($500); and a second or subsequent violation is subject to a fine of one thousand dollars ($1,000).
(d)Sell goods at auction before the auctioneer or auction company involved has first entered into a written contract with the owner or consignor of the goods, which

contract sets forth the terms and conditions upon which the auctioneer or auction company accepts the goods for sale. The written contract shall include all of the following:

(1)The auctioneer’s or auction company’s name, trade or business name, business address, and business telephone number.
(2)An inventory of the item or items to be sold at auction.
(3)A description of the services to be provided and the agreed consideration for the services, which description shall explicitly state which party shall be responsible for advertising and other expenses.
(4)The approximate date or dates when the item or items will be sold at auction.
(5)A statement as to which party shall be

responsible for insuring the item or items against loss by theft, fire, or other means.

(6)A disclosure that the auctioneer or auction company has a bond on file with the Secretary of State. A first violation of this subdivision is an infraction subject to a fine of two hundred fifty dollars ($250); a second violation is subject to a fine of five hundred dollars ($500); and a third or subsequent violation is subject to a fine of one thousand dollars ($1,000).
(e)Sell goods at auction before the auctioneer or auction company involved has first entered into a written contract with the auctioneer who is to conduct the auction. A first violation of this subdivision is an infraction subject to a fine of one hundred dollars ($100); and a second or subsequent violation is subject to a fine of two hundred fifty dollars ($250).
(f)Fail to reduce to writing all amendments or addenda to any written contract with an owner or consignor or an auctioneer. A first violation of this subdivision is an infraction subject to a fine of one hundred dollars ($100); and a second or subsequent violation is subject to a fine of two hundred fifty dollars ($250).
(g)Fail to abide by the terms of any written contract required by this section. A first violation of this subdivision is an infraction subject to a fine of one hundred dollars ($100); and a second or subsequent violation is subject to a fine of two hundred fifty dollars ($250).
(h)Cause or allow any person to bid at a sale for the sole purpose of increasing the bid on any item or items being sold by the auctioneer, except as authorized by Section 2328 of the Commercial Code or by this title. A violation of this subdivision includes, but is not

limited to, either of the following:

(1)Stating any increased bid greater than that offered by the last highest bidder when, in fact, no person has made such a bid.
(2)Allowing the owner, consignor, or agent thereof, of any item or items to bid on the item or items, without disclosing to the audience that the owner, consignor, or agent thereof has reserved the right to so bid.

A violation of this subdivision is an infraction subject to a fine of one hundred dollars ($100).

(i)Knowingly misrepresent the nature of any item or items to be sold at auction, including, but not limited to, age, authenticity, value, condition, or origin. A violation of this subdivision is an infraction subject to a fine of two hundred fifty dollars ($250). In addition, it shall be required that

the buyer of the misrepresented item be refunded the purchase price of the item or items within 24 hours of return to the auctioneer or auction company of the item by the buyer, provided that the item is returned within five days after the date of the auction sale.

(j)Misrepresent the terms, conditions, restrictions, or procedures under which goods will be sold at auction. A violation of this subdivision is an infraction subject to a fine of seventy-five dollars ($75).
(k)Sell any item subject to sales tax without possessing a valid and unrevoked seller’s permit from the State Board of Equalization. A violation of this subdivision is an infraction subject to a fine of five hundred dollars ($500).

Added by Stats. 2002, Ch. 815, Sec. 22. Effective January 1, 2003.

Any waiver of the provisions of this title is contrary to public policy, and is void and unenforceable.

Added by Stats. 1969, Ch. 1571.

Any waiver of the buyer of the provisions of this title shall be deemed contrary to public policy and shall be void and unenforceable.

Amended by Stats. 2015, Ch. 354, Sec. 1. (SB 474) Effective September 28, 2015.

(a)Notwithstanding Section 1812.601, for purposes of this section, an auction includes the sale of real property and an “auctioneer” means any individual who is engaged in, or who by advertising or otherwise holds himself or herself out as being available to engage in, the calling for, the recognition of, and the acceptance of, offers for the purchase of real property at an auction.
(b)An auctioneer shall not state at an auction that an increased bid greater than that offered by the last highest bidder has been made when, in fact, no person has made an increased bid. Notwithstanding the foregoing, an auctioneer or another authorized person may place a bid on the seller’s behalf during an auction of real property that would not result in a sale of the real property, if both of the following are true:
(1)Notice is given to all auction participants, including all other bidders, that liberty for that type of bidding is reserved and that type of bid will not result in the sale of the real property.
(2)The person placing that type of bid contemporaneously discloses to all auction participants, including all other bidders, that the particular bid has been placed on behalf of the seller.
(c)For the purpose of the conduct of online auctions of real property, “notice” means a statement of the information required to be given under paragraph (1) of subdivision (b) within the end user license agreement, terms of service, or equivalent policy posted on, or provided by, the operator of an Internet Web site, online service, online application, or mobile application, and by conspicuously posting the information required to be given under paragraph (1) of subdivision (b) in any of the following ways:
(1)Upon the Internet Web page or its equivalent through which a user directly interacts with the site, service, or application during the online auction.
(2)With an icon that hyperlinks to an Internet Web page or its equivalent upon which the required information is posted, if the icon is located on the Internet

Web page or its equivalent through which a user directly interacts with the site, service, or application during the online auction. The icon shall use a color that contrasts with the background color of the Internet Web page or is otherwise readily distinguishable.

(3)With a text link that hyperlinks to an Internet Web page or its equivalent upon which the required information is posted, if the text link is located on the Internet Web page or its equivalent through which a user directly interacts with the site, service, or application during the online auction. The text link shall be written in capital letters that are in larger type than the surrounding text, or shall be written in contrasting type, font, or color to the surrounding text of the same size, or shall be set off from the surrounding text of the same size by symbols or other marks that call attention to the language.
(4)With any other functional hyperlink or its equivalent that is displayed on the site, service, or application through which a user directly interacts with the site, service, or application during the online auction so that a reasonable person would notice it and understand it to hyperlink to the required information.

Added by Stats. 1969, Ch. 1571.

(a)Any buyer injured by a violation of this title may bring an action for the recovery of damages. Judgment may be entered for three times the amount at which the actual damages are assessed plus reasonable attorney fees.
(b)Notwithstanding the provisions of this title, any failure to comply with any provision of this title may be corrected within 30 days after the execution of the contract by the buyer, and, if so corrected, neither the seller nor the holder shall be subject to any penalty under this title, provided that any correction which increases any monthly payment, the number

of payments, or the total amount due, must be concurred in, in writing, by the buyer. “Holder” includes the seller who acquires the contract, or, if the contract is purchased by a financing agency or other assignee, the financing agency or other assignee.

Added by Stats. 1994, Ch. 1026, Sec. 1. Effective January 1, 1995.

This title shall be known and may be cited as the Karnette Rental-Purchase Act.

Added by Stats. 1994, Ch. 1026, Sec. 1. Effective January 1, 1995.

The Legislature hereby finds and declares that consumers enter into rental-purchase contracts that do not adequately disclose the actual terms and cost of the transaction or the consumer’s liability for certain breaches of the contract, and that contain unfair provisions, including unfair terms related to fees and charges, the exercise or the termination of purchase option rights, property loss and damage, and the repair or replacement of improperly functioning rental property.

It is, therefore, the intent of the

Legislature in enacting this title to ensure that consumers are protected from misrepresentations and unfair dealings by ensuring that consumers are adequately informed of all relevant terms, including the cash price, periodic payments, total purchase price, and other applicable charges or fees, before they enter into rental-purchase contracts.

It is further the intent of the Legislature to (a) prohibit unfair or unconscionable conduct toward consumers in connection with rental-purchase transactions, (b) prohibit unfair contract terms, including unreasonable charges, (c) prevent the forfeiture of contract rights by consumers, (d) provide a right of reinstatement and a reasonable formula for the exercise of purchase option rights under a rental-purchase contract, (e) provide reasonable requirements for the servicing, repair, and replacement of improperly functioning rental property, and (f) cover rental-purchase transactions under existing laws, including laws

governing debt collection, cosigners, home solicitation contracts, and warranties. This title shall be liberally construed to achieve its remedial objectives.

Amended by Stats. 2014, Ch. 426, Sec. 1. (AB 2667) Effective January 1, 2015.

As used in this title:

(a)“Advertisement” means a commercial message in any medium that directly or indirectly solicits or promotes one or more specific rental-purchase transactions, excluding instore merchandising aids. This definition does not limit or alter the application of other laws, including Chapter 5 (commencing with Section 17200) of Part 2 and

Chapter 1 (commencing with Section 17500) of Part 3, of Division 7 of the Business and Professions Code, to rental-purchase transactions.

(b)“Consumer” means a natural person or persons who rent or lease personal property from a lessor pursuant to a rental-purchase agreement or to whom a lessor offers personal property for use pursuant to a rental-purchase agreement.
(c)“Lessor” means any person or entity that provides or offers to provide personal property for use by consumers pursuant to a rental-purchase agreement.
(d)“Rental-purchase agreement,” except as otherwise provided in this subdivision, means an agreement between a lessor and a consumer pursuant to which the lessor rents or leases, for valuable consideration, personal property for use by a consumer for personal, family, or household purposes for an

initial term not exceeding four months that may be renewed or otherwise extended, if under the terms of the agreement the consumer acquires an option or other legally enforceable right to become owner of the property. A rental-purchase agreement is a lease subject to Title 1.5 (commencing with Section 1750) and Title 1.7 (commencing with Section 1790).

“Rental-purchase agreement” shall not be construed to be, nor be governed by, and shall not apply to, any of the following:

(1)A retail installment sale, as defined in Section 1802.5.
(2)A retail installment contract, as defined in Section 1802.6.
(3)A retail installment account, as defined in Section 1802.7.
(4)A lease or agreement that constitutes a

security interest, as defined in Section 1201 of the Commercial Code.

(5)A consumer credit contract, as defined in Section 1799.90.
(e)“Cash price” means the price of the personal property described in the rental-purchase agreement that the consumer may pay in cash to the lessor at the inception of the rental-purchase agreement to acquire ownership of that personal property.
(f)“Cost of rental” means the difference between the total of all periodic payments necessary to acquire ownership under the rental-purchase agreement and the cash price of the rental property that is subject to the rental-purchase agreement.
(g)“Fee” means any payment, charge, fee, cost, or expense, however denominated, other than a rental payment.
(h)“Appliance” means and includes any refrigerator, freezer, range including any cooktop or oven, microwave oven, washer, dryer, dishwasher, or room air-conditioner or air purifier.
(i)“Electronic set” means and includes any television, radio, camera, video game, or any type of device for the recording, storage, copying, printing, transmission, display, or playback of any sound or image, but does not include any item that is part of a computer system.
(j)“Computer system” means a computer processor and a video monitor, printer, and peripheral items primarily designed for use with a computer. Audio and video devices, which are commonly used for entertainment and into which data may be downloaded from a computer, are not part of a computer system.
(k)“Lessor’s cost” means the documented actual cost, including actual freight charges, of the rental property to the lessor from a wholesaler, distributor, supplier, or manufacturer and net of any discounts, rebates, and incentives.
(l)“Total of payments” means the total amount of periodic payments necessary to acquire ownership of the property that is the subject of the rental-purchase agreement if the consumer makes all regularly scheduled payments.
(m)“Electronic device” means a desktop or laptop computer, handheld device, tablet, smartphone, or other electronic product or device that has a platform on which to download, install, or run any software program, code, script, or other content.
(n)“Geophysical location tracking technology” means hardware, software, or an application that

collects and reports data or information that identifies the precise geophysical location of an item, including technologies that report the GPS coordinates of an electronic device, the WiFi signals available to or actually used by an electronic device to access the Internet, the telecommunication towers or connections available to or actually used by an electronic device, the processing of any reported data or information through geolocation lookup services, or any information derived from any combination of the foregoing.

(o)“Monitoring technology” means any hardware, software, or application utilized in conjunction with an electronic device that can cause the electronic device to capture, monitor, record, or report information about user activities with or without the user’s knowledge.
(p)“Remote technical assistance” means collaborative access by the user and technician to

connect to an electronic device for the purpose of providing technical support to the user.

(q)“Express consent” means the affirmative agreement to any use or installation of geophysical location tracking technology or remote technical assistance. Express consent does not include consent given when either option is highlighted or preselected as a default setting.

Amended by Stats. 2006, Ch. 410, Sec. 2. Effective January 1, 2007.

(a)Every rental-purchase agreement shall be contained in a single document which shall set forth all of the agreements of the lessor and the consumer with respect to the rights and obligations of each party. Every rental-purchase agreement shall be written in

at least 10-point type in the same language as principally used in any oral sales presentation or negotiations leading to the execution of the agreement, and shall clearly and conspicuously disclose all of the following:

(1)The names of the lessor and the consumer, the lessor’s business address and telephone number, the consumer’s address, the date on which the agreement is executed, and a description of the property sufficient to identify it.
(2)Whether the property subject to the rental-purchase agreement is new or used. If the property is new, the lessor shall disclose the model year or, if the model year is not known by the lessor, the date of the lessor’s acquisition of the property. If the property is used, the age or the model year shall be disclosed if known by the lessor.
(3)The minimum period for which

the consumer is obligated under the rental-purchase agreement; the duration of the rental-purchase agreement if all regularly scheduled periodic payments are made, designated as the “rental period”; and the amount of each periodic payment.

(4)The total of payments and the total number of periodic payments necessary to acquire ownership of the property if the renter makes all regularly scheduled periodic payments.
(5)The cash price of the property subject to the rental purchase agreement.
(6)The cost of rental.
(7)The amount and purpose of any other payment or fee permitted by this title in addition to those specified pursuant to paragraphs (3) and (4), including any late payment fee.
(8)A statement that the total number and dollar amount of payments necessary to acquire ownership of the rental property disclosed under paragraph (4) does not include other fees permitted by this title, such as late payment fees, and that the consumer should read the rental-purchase agreement for an explanation of any applicable additional fees.
(9)Whether the consumer is liable for loss or damage to the rental property and, if so, the maximum amount for which the consumer may be liable as provided in subdivision (a) of Section 1812.627.
(10)The following notice:

You are renting this property. You will not own it until you make all of the regularly scheduled payments or you use the early purchase option.

You do not

have the right to keep the property if you do not make required payments or do not use the early purchase option. If you miss a payment, the lessor can repossess the property, but, you may have the right to the return of the same or similar property.

See the contract for an explanation of your rights.

(11)A description of the consumer’s right to acquire ownership of the property before the end of the rental period as provided in subdivisions (a) and (b) of Section 1812.632.
(12)A description of the consumer’s reinstatement rights as provided in Section 1812.631.
(13)If warranty coverage is transferable to a consumer who acquires ownership of the property, a statement that the unexpired portion of all warranties provided by the manufacturer, distributor, or seller of

the property that is the subject of the rental-purchase agreement will be transferred by the lessor to the consumer at the time the consumer acquires ownership of the property from the lessor.

(14)A description of the lessor’s obligation to maintain the rental property and to repair or replace rental property that is not operating properly, as provided in Section 1812.633.
(b)(1) The disclosures required by paragraphs (3), (4), (5), and (6) of subdivision (a) shall be printed in at least 10-point boldface type or capital letters if typed and shall be grouped together in a box formed by a heavy line in the following form:
(2)The box described in paragraph (1) shall appear

immediately above the space reserved for the buyer’s signature.

(c)The disclosures required by paragraphs (3), (4), (5), and (6) of subdivision (a) shall be grouped together in a box formed by a heavy line in the form prescribed in subdivision (b) and shall be clearly and conspicuously placed on a tag or sticker affixed to the property available for rental-purchase. If the property available for rental-purchase is not displayed at the lessor’s place of business but appears in a photograph or catalog shown to consumers, a tag or sticker shall be affixed to the photograph of the property or catalog shown to consumers or shall be given to consumers. The disclosure required by paragraph (2) of subdivision (a) also shall be clearly and conspicuously placed on the tag or sticker.
(d)All disclosures required by this section shall be printed or typed in a color or shade that clearly

contrasts with the background.

Amended by Stats. 2006, Ch. 410, Sec. 3. Effective January 1, 2007.

(a)No rental-purchase agreement or any document that the lessor requests the consumer to sign shall contain any provision by which:
(1)A power of attorney is given to confess judgment in this state or to appoint the lessor, its agents, or its successors in interest as the consumer’s agent in the collection of payments or the repossession of the rental property.
(2)The consumer authorizes the lessor or its

agent to commit any breach of the peace in repossessing the rental property or to enter the consumer’s dwelling or other premises without obtaining the consumer’s consent at the time of entry.

(3)The consumer agrees to purchase from the lessor insurance or a liability waiver against loss or damage to the rental property.
(4)The consumer waives or agrees to waive any defense, counterclaim, or right the consumer may have against the lessor, its agent, or its successor in interest.
(5)The consumer is required to pay any fee in connection with reinstatement except as provided in Section 1812.631.
(6)The consumer is required to pay a fee in connection with the pickup of the property or the termination or rescission of the rental-purchase agreement.
(7)The consumer is required to pay any fee permitted by the rental-purchase agreement and this title that is not reasonable and actually incurred by the lessor. The lessor has the burden of proof to establish that a fee was reasonable and was an actual cost incurred by the lessor.
(8)The consumer is required to pay a downpayment, more than one advance periodic rental payment, or any other payment except a security deposit permitted under Section 1812.625.
(9)Except to the extent permitted by subdivision (b) of Section 1812.627, the consumer waives any rights under Sections 1928 or 1929.
(10)The consumer grants a security interest in any property.
(11)The consumer’s liability for loss or

damage to the property which is the subject of the rental-purchase agreement may exceed the maximum described in subdivision (a) of Section 1812.627.

(12)Except under the circumstances authorized by subdivision (a) or (b) of Section 1812.632, the consumer is obligated to make any balloon payment. A “balloon payment” is any payment for the purchase or use of the rental property which is more than the regularly scheduled periodic payment amount.
(13)The consumer is required to pay a late payment fee that is not permitted under Section 1812.626.
(14)The consumer is required to pay both a late payment fee and a fee for the lessor’s collection of a past due payment at the consumer’s home or other location.
(15)The consumer waives or offers to waive any

right or remedy against the lessor, its agents, or its successors in interest for any violation of this title or any other illegal act. This subdivision does not apply to a document executed in connection with the bona fide settlement, compromise, or release of a specific disputed claim.

(16)The lessor, its agents, or its successors in interest may commence any judicial action against the consumer in a county other than the county in which (A) the rental-purchase agreement was signed or (B) the consumer resides at the time the action is commenced.
(17)The amount stated as the cash price for any item of personal property exceeds the cash price permitted under Section 1812.644.
(18)The total of payments exceeds the amount permitted under Section 1812.644.
(b)Any provision in a rental-purchase agreement that is prohibited by this title shall be void and unenforceable and a violation of this title. A rental-purchase agreement which contains any provision that is prohibited by this title is voidable by the consumer.

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