(a) The contract shall contain in immediate proximity to the space reserved for the equity seller’s signature a conspicuous statement in a size equal to at least 12-point bold type, if the contract is printed or in capital letters if the contract is typed, as follows:

“You may cancel this contract for the sale of your house with­out any penalty or obligation at any time before

Terms Used In California Civil Code 1695.5

  • Contract: A legal written agreement that becomes binding when signed.
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Rescission: The cancellation of budget authority previously provided by Congress. The Impoundment Control Act of 1974 specifies that the President may propose to Congress that funds be rescinded. If both Houses have not approved a rescission proposal (by passing legislation) within 45 days of continuous session, any funds being withheld must be made available for obligation.

_____ (Date and time of day) _____ .

See the attached notice of cancellation form for an explanation of this right.”

The equity purchaser shall accurately enter the date and time of day on which the rescission right ends.

(b)?The contract shall be accompanied by a completed form in duplicate, captioned “notice of cancellation” in a size equal to 12-point bold type, if the contract is printed or in capital letters if the contract is typed, followed by a space in which the equity purchaser shall enter the date on which the equity seller executes any contract. This form shall be attached to the contract, shall be easily detachable, and shall contain in type of at least 10-point, if the contract is printed or in capital letters if the contract is typed, the following statement written in the same language as used in the contract:

“NOTICE OF CANCELLATION

_____ (Enter date contract signed) _____

You may cancel this contract for the sale of your house, without any penalty or obligation, at any time before

_____ (Enter date and time of day) _____ .

To cancel this transaction, personally deliver a signed and dated copy of this cancellation notice, or send a telegram

to  _____ (Name of purchaser) _____ ,

at  _____ (Street address of purchaser’s place of business) _____

NOT LATER THAN (Enter date and time of day) .

I hereby cancel this transaction _____ (Date) _____ .

(Seller’s signature)”

(c) The equity purchaser shall provide the equity seller with a copy of the contract and the attached notice of cancellation.

(d) Until the equity purchaser has complied with this section, the equity seller may cancel the contract.

(Amended by Stats. 1997, Ch. 50, Sec. 2. Effective January 1, 1998.)

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