Governor Signs Legislation Prohibiting Unsolicited Offers in Portions of L.A. and Ventura Counties - New Recording Requirement Applies

Governor Newsom signed into law Assembly Bill 851 (McKinnor), prohibiting persons from making an unsolicited offer to purchase residential real property in certain ZIP Codes in Los Angeles and Ventura counties that were affected by wildfires earlier this year.

Although urgency legislation that became effective immediately upon being signed, the new law contains a provision that delays its operative date by 30 days. This delayed operative date was added at CLTA’s request and is intended to allow time for the real estate industry to implement the new law and its requirements.  The final version of the legislation also incorporates several other recommendations made by the CLTA.  

The new law requires that a buyer record a signed attestation executed by both the buyer and seller affirming that a purchase agreement was not entered into because of an unsolicited offer in violation of the provisions of the new law. The attestation must be recorded as an attachment to the deed. The attestation creates a presumption that the accepted offer was solicited by the seller unless there is clear and convincing evidence to the contrary. 
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The law does specify that a buyer’s failure to record the signed attestation does not affect constructive notice imparted by the proper recordation of the deed or conveyance and does not affect the rights of any subsequent bona fide purchaser or encumbrancer.