If the loan is not consummated due to the failure of the borrower to disclose the outstanding liens of record or the correct current vested title which is material to the loan upon the real property as provided by subdivision (c) of Section 10241, the borrower shall be liable for the costs and expenses provided in subdivision (a) of Section 10241 that have been paid or incurred and shall be liable for the payment of one-half of the charges provided in subdivision (b) of Section 10241. An exclusive agreement authorizing or retaining a licensee to negotiate a loan secured directly or collaterally by a lien on real property shall be limited to a term of not more than 45 days.

If the loan is not consummated and the broker is entitled to any charges, costs, or expenses authorized by this article, he or she may not record a lien or encumbrance against the borrower’s property except subsequent to the filing of a legal action pursuant to the Code of Civil Procedure to recover said charges, costs, or expenses. However, nothing contained herein shall prohibit a broker from recording a lien pursuant to a voluntary lien agreement in conjunction with a stipulation to dismiss an actual or proposed complaint for damages entitling the broker to those charges, costs, or expenses after written notice to the borrower that the broker proposes or has initiated a complaint for damages pursuant to the Code of Civil Procedure.

Terms Used In California Business and Professions Code 10243

  • Complaint: A written statement by the plaintiff stating the wrongs allegedly committed by the defendant.
  • Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
  • Licensee: means any person authorized by a license, certificate, registration, or other means to engage in a business or profession regulated by this code or referred to in Sections 1000 and 3600. See California Business and Professions Code 23.8
  • 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.
  • Subdivision: means a subdivision of the section in which that term occurs, unless some other section is expressly mentioned. See California Business and Professions Code 15

(Amended by Stats. 2018, Ch. 285, Sec. 51. (AB 2884) Effective January 1, 2019.)

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