California Code of Regulations › Title 10 - Investment › Chapter 6 - Real Estate Commissioner › Article 12 - Subdivisions › Section 2799.1 - Subdivision Advertising Criteria

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Standards which will be applied by the
				Real Estate Commissioner in determining whether advertising for sale or lease
				of subdivision interests is false, untrue or misleading within the meaning of
				those terms in Sections
				10140,
				10177(c),
				11022
				and
				17500
				of the Business and Professions Code shall include, but shall not be limited to
				the following:
(1) Advertising shall not imply
				a use of a subdivision interest that is not set forth in the Notice of
				Intention and Questionnaire comprising the application for a public report or
				permit.
(2) A subdivision shall not
				be advertised under a name, designation or appellation that is not set forth in
				a Notice of Intention and Questionnaire.
(3) A subdivision shall not be advertised by
				a name or trade style which implies, contrary to fact, that the subdivider or
				his agent is a bona fide research organization, public agency, nonprofit
				organization or similar entity.
(4)
				No improvement, facility or utility service may be advertised unless it has
				been completed or installed and is available for use, or unless completion and
				availability for use are assured through bonding or other arrangements approved
				by the commissioner. If not completed, the estimated date of completion shall
				be set forth in the advertising.
(5) There shall be no reference to the
				prospective availability of private facilities outside of the subdivision for
				the use and enjoyment of purchasers of subdivision interests if the facilities
				are to be constructed or installed by the subdivider or an affiliated entity
				unless financial arrangements for completion or installation have been approved
				by the commissioner.
(6) There
				shall be no reference to proposed or uncompleted private facilities over which
				the subdivider has no control unless the estimated date of completion is set
				forth and unless evidence has been presented to the commissioner that the
				completion and operation of the facilities are reasonably assured within the
				time represented in the advertisement.
(7) Unless the facilities and improvements
				listed below have been completed, or unless financial and other arrangements
				for completion have been made, subdivided land offered for residential use
				shall not be described as "improved," "developed," or by similar terms without
				disclosure of any facility or improvement listed below that is not included in
				the offering:
(A) Paved roads within the
				subdivision.
(B) A potable water
				system.
(C) A sewage
				system.
(D) A source of electricity
				at the building site.
(8)
				Reference shall not be made to a proposed public facility or project which
				purports to affect the value and utility of subdivided lands without a
				disclosure of the existing status of the proposed facility based upon
				information supplied or verified by the authority responsible for the public
				facility or project.
(9) A
				subdivider shall not advertise the availability of financing for on-site
				construction unless he has a bona fide written expression of an intention to
				finance such construction by a recognized lender or unless the subdivider has
				established to the satisfaction of the commissioner that financing of on-site
				construction will be provided by a source other than a recognized
				lender.
(10) Pictoral or
				illustrative depictions of the subdivision and surrounding lands must
				accurately portray the land as it exists and proposed improvements as they will
				be constructed.
(11) Pictoral or
				illustrative depictions other than unmodified photographs shall bear a
				prominent disclosure identifying the nature of the depiction, e.g., ARTIST'S
				CONCEPTION and a legend identifying those improvements which are not then in
				existence.
(12) If a map or diagram
				is used to show the location of the subdivision in relation to other places,
				actual road miles from each other place to the subdivision shall be shown or
				the map or diagram shall be prepared to scale and shall include a scale of
				miles.
(13) If there is advertising
				of streets, roads, sewers, storm drains or other utilities which have not been
				accepted for maintenance by a public entity, that fact must be disclosed in the
				advertising. Rights-of-way for passenger vehicles to a subdivision or to lots
				within a subdivision which have not been accepted for maintenance by a public
				entity shall be adequately described in terms of roadbed and
				surfacing.
(14) If the existence of
				a lake, river, canal or other body of water, which is subject to a fluctuating
				water level other than through natural causes, is advertised as a feature of
				the subdivision, any significant effect of the fluctuation upon the use of the
				water facility and upon the subdivision interests shall be described.
(15) No advertisement shall imply that a
				facility is available for the exclusive use of purchasers of subdivision
				interests if a public right of access or of use of the facility
				exists.
(16) There shall be no
				reference to the availability for use by owners of subdivision interests of
				private clubs or facilities in which an owner will not acquire a proprietary
				interest through purchase of a subdivision interest without an accompanying
				disclosure that the existence of the facilities and their availability for use
				by subdivision interest owners are at the pleasure of the owner of the
				facility.
(17) An advertisement of
				any facility in which a purchaser will acquire a proprietary interest with his
				purchase of a subdivision must set forth the estimated costs and other
				obligations of the purchaser with respect to the facility or shall refer the
				purchaser to a fact sheet or similar source of this information.
(18) No representation may be made that
				subdivision interests being offered for sale can be further divided unless a
				full disclosure is included as to the legal requirements for further division
				of the interests.
(19) Subdivision
				interests may not be advertised as available at a particular minimum price if
				the number of subdivision interests available at that price comprise less than
				10% of the unsold inventory of the subdivider, unless the number of lots then
				for sale at the minimum price is set forth in the advertisement.
(20) Advertising of a discounted purchase
				price shall not be made unless the subdivider has established base prices for
				application of the discount through a substantial number of sales at base
				prices.
(21) A prospective increase
				in the price of a subdivision interest other than an interest offered with an
				on-site residential, commercial or industrial structure may not be implied nor
				shall a price increase of such a subdivision interest be announced more than
				sixty days prior to the date that the increase will be placed into
				effect.
(22) If the phrase "closing
				costs only" or similar terminology is used to describe the price of a
				subdivision interest, the estimated dollar amount of the costs must be set
				forth in the advertisement.
(23)
				The total amount of any special bonded indebtedness, or the range of such
				bonded indebtedness, against the subdivision interests shall be set forth in
				any advertisement which states or implies that off-site improvements for the
				subdivision have been completed and paid for in connection with the development
				of the project. If the selling price of a subdivision interest is advertised,
				the special bonded indebtedness against that subdivision interest shall be
				given equal prominence with the selling price unless the bonded indebtedness is
				included in the advertised selling price.
(24) No representation shall be made as to
				the availability of a resale program offered by or on behalf of the subdivider
				unless the resale program has been made a part of the offering as submitted to
				the commissioner.
(25) An asterisk
				or other reference symbol may be used to explain, but not to contradict or to
				change the ordinary meaning of the material in the body of the
				advertisement.
(26) Unless an offer
				made in connection with a sales promotion is unequivocally without conditions,
				the terms "free," "no obligation" or terms of similar import may not be used to
				describe that which is offered.
(27) Offers of travel, accommodations, meals
				or entertainment at no cost or reduced cost, the purpose of which is to promote
				sales, shall not be described as "awards," "prizes" or by words of similar
				import.
(28) Offers or
				solicitations of trip reservations to visit subdivided property or any other
				place where a sales presentation for subdivided property is to be made shall
				set forth all conditions, limitations or qualifications that will be applied
				before the recipient will be allowed to make the trip.
(29) The approximate retail value of any
				gift, prize or premium offered through an advertisement to prospective
				purchasers shall be set forth in the advertisement.
(30) Complete rules and procedures for any
				contest or drawing advertised in connection with the marketing of subdivision
				interests shall be included in the advertisement, or the advertisement shall
				state the means by which a person can secure full information concerning said
				rules and procedures prior to his participation in the contest or
				drawing.
(31) Advertising shall not
				include testimonials or endorsements which contain matters which the subdivider
				would be precluded by law or regulation from making in his own
				behalf.
(32) An offer or inducement
				to purchase which purports to be limited as to quantity or restricted as to
				time shall set forth the numerical quantity and/or time applicable to the offer
				or inducement.
(33) An
				advertisement or an offering of undivided or fractional interests in a
				subdivision, which does not include a right of exclusive ownership or occupancy
				of a particular lot, parcel or unit by the purchaser, shall disclose the total
				number of undivided or fractional interests to be offered for sale in the
				subdivision.
(34) If the
				subdivision offering involves something less than a fee interest with an
				exclusive and perpetual right to occupy a lot, parcel or unit, e.g., a
				leasehold or time-sharing-ownership interest, the limitations and restrictions
				on occupancy rights shall be included in the advertisement or the advertisement
				shall refer the purchaser to a fact sheet or similar source of this
				information.
(35) No direct mail
				advertisement purporting to have resulted through a referral shall be used
				unless the solicitation includes the name of the person making said
				referral.
(36) Investment merit or
				profit potential of a subdivision interest other than an interest which is
				offered with an on-site residential, commercial or industrial structure shall
				not be expressed or implied unless the commissioner has determined from
				evidence submitted by or on behalf of the subdivider that the representation is
				neither false nor misleading.
(37)
				Statements appearing in the public report for a subdivision shall not be
				quoted, paraphrased or cited out of context nor shall any part of the public
				report be underscored, italicized, bold faced or otherwise highlighted except
				in strict conformance with highlighting in the public report
				itself.