California Business and Professions Code 10085.5 – (a) It shall be unlawful for any person to claim, demand, …
(a) It shall be unlawful for any person to claim, demand, charge, receive, collect, or contract for an advance fee (1) for soliciting lenders on behalf of borrowers or performing services for borrowers in connection with loans to be secured directly or collaterally by a lien on real property, before the borrower becomes obligated to complete the loan or, (2) for performing any other activities for which a license is required, unless the person is a licensed real estate broker and has complied with the provisions of this part.
(b) This section does not prohibit the acceptance or receipt of an advance fee by any bank, savings association, credit union, industrial loan company, or person acting within the scope of a license issued to that person pursuant to Division 9 (commencing with Section 22000) of the Financial Code, in connection with loans to be secured directly or collaterally by a lien on real property. This section does not apply to charges made by title insurers and controlled escrow companies pursuant to Chapter 1 (commencing with Section 12340) of Part 6 of Division 2 of the Insurance Code.
Terms Used In California Business and Professions Code 10085.5
- advance fee: as used in this part , is a fee, regardless of the form, that is claimed, demanded, charged, received, or collected by a licensee for services requiring a license, or for a listing, as that term is defined in Section 10027, before fully completing the service the licensee contracted to perform or represented would be performed. See California Business and Professions Code 10026
- Contract: A legal written agreement that becomes binding when signed.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- County: includes city and county. See California Business and Professions Code 17
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- license: means license, certificate, registration, or other means to engage in a business or profession regulated by this code or referred to in Section 1000 or 3600. See California Business and Professions Code 23.7
- Lien: A claim against real or personal property in satisfaction of a debt.
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
(c) A violation of this section is a public offense punishable by a fine not exceeding ten thousand dollars ($10,000), by imprisonment in the county jail for a term not to exceed six months, or by both that fine and imprisonment, or if by a corporation, the violation is punishable by a fine not exceeding fifty thousand dollars ($50,000).
(Amended by Stats. 1998, Ch. 485, Sec. 7. Effective January 1, 1999.)