Bill > AB1406

This bill modifies existing law regarding liquidated damages in contracts for the sale of newly constructed attached residential condominium units, which are homes within a building or complex containing 10 or more units. Previously, if a buyer defaulted on the purchase of such a unit, the seller could keep up to 10% of the purchase price as liquidated damages, which are pre-agreed amounts paid to compensate for a loss. This bill reduces that allowable percentage to 6%. If the seller retains more than 6% of the purchase price, they must conduct an accounting of their costs and revenues related to the unit and refund any amount exceeding either 6% of the original purchase price or the seller's actual losses due to the buyer's default, whichever is greater. The seller must also make reasonable efforts to minimize their losses.

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https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260AB1406