| 1 | 1 | | 23 LC 49 1256 |
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| 2 | 2 | | H. B. 669 |
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| 3 | 3 | | - 1 - |
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| 4 | 4 | | House Bill 669 |
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| 5 | 5 | | By: Representative Smith of the 18 |
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| 6 | 6 | | th |
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| 7 | 7 | | |
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| 8 | 8 | | A BILL TO BE ENTITLED |
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| 9 | 9 | | AN ACT |
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| 10 | 10 | | To amend Title 10 of the Official Code of Georgia Annotated, relating to commerce and |
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| 11 | 11 | | 1 |
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| 12 | 12 | | trade, so as to provide for future real estate listing right purchase contracts; to provide for2 |
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| 13 | 13 | | definitions; to provide for a short title; to provide for contract requirements; to provide for3 |
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| 14 | 14 | | prohibitions; to provide for required disclosures, terms, and conditions; to provide for4 |
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| 15 | 15 | | cancellation; to provide for construction; to provide for assignment and recording of such5 |
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| 16 | 16 | | contracts; to require and provide for registration of purchasing companies with the Secretary6 |
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| 17 | 17 | | of State; to authorize the Secretary of State to adopt rules and regulations; to provide for7 |
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| 18 | 18 | | legislative intent; to provide for an effective date and applicability; to provide for related8 |
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| 19 | 19 | | matters; to repeal conflicting laws; and for other purposes.9 |
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| 20 | 20 | | BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:10 |
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| 21 | 21 | | SECTION 1.11 |
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| 22 | 22 | | It is the intent of the General Assembly that to promote consumer protections in connection12 |
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| 23 | 23 | | with transactions and agreements related to the purchase of future real estate listing rights13 |
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| 24 | 24 | | from consumers, this Act shall establish that such transactions be subject to state regulation14 |
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| 25 | 25 | | and set forth requirements regarding disclosure, company registration, limitations, violations,15 |
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| 26 | 26 | | and other matters.16 23 LC 49 1256 |
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| 27 | 27 | | H. B. 669 |
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| 28 | 28 | | - 2 - |
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| 29 | 29 | | SECTION 2. |
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| 30 | 30 | | 17 |
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| 31 | 31 | | Title 10 of the Official Code of Georgia Annotated, relating to commerce and trade, is18 |
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| 32 | 32 | | amended by adding a new chapter to read as follows:19 |
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| 33 | 33 | | "CHAPTER 6C |
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| 34 | 34 | | 20 |
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| 35 | 35 | | 10-6C-1.21 |
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| 36 | 36 | | This chapter shall be known and may be cited as the "Listing Rights Purchase Act."22 |
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| 37 | 37 | | 10-6C-2.23 |
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| 38 | 38 | | As used in this chapter, the term:24 |
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| 39 | 39 | | (1) 'Consumer' means a natural person who has a pending legal interest in real property25 |
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| 40 | 40 | | that is the subject of a future listing right purchase contract and who resides or is26 |
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| 41 | 41 | | domiciled in this state.27 |
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| 42 | 42 | | (2) 'Contract purchase price' means the amount of money paid to a consumer as28 |
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| 43 | 43 | | consideration for entering into a future listing right purchase contract.29 |
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| 44 | 44 | | (3) 'Future listing right purchase contract' means a contractual right to obligate a30 |
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| 45 | 45 | | consumer to enter into a real estate listing agreement with a particular individual or entity31 |
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| 46 | 46 | | relating to the future sale of a residential home, townhouse, or condominium.32 |
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| 47 | 47 | | (4) 'Purchase date' means the date on which the contract purchase price is transferred to33 |
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| 48 | 48 | | the consumer by the company either by personal delivery or via wire, ACH or other34 |
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| 49 | 49 | | electronic means, or mailed by insured, certified, or registered United States mail.35 |
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| 50 | 50 | | (5) 'Purchasing company' or 'company' means a person or entity that enters into a future36 |
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| 51 | 51 | | listing right purchase contract.37 |
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| 52 | 52 | | (6) 'Real estate listing agreement' means an agreement to list real estate for sale.38 23 LC 49 1256 |
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| 53 | 53 | | H. B. 669 |
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| 54 | 54 | | - 3 - |
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| 55 | 55 | | 10-6C-3.39 |
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| 56 | 56 | | All future listing right purchase contracts shall meet the following requirements:40 |
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| 57 | 57 | | (1) All blanks in the contract shall be completely filled in when it is presented to the41 |
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| 58 | 58 | | consumer for signature;42 |
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| 59 | 59 | | (2) The contract shall contain, in at least 12 point bold font, a right of rescission,43 |
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| 60 | 60 | | allowing the consumer to cancel the contract without penalty or further obligation if,44 |
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| 61 | 61 | | within five business days after the funding date, the consumer either:45 |
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| 62 | 62 | | (A) Returns to the company the full amount of the disbursed funds by delivering the46 |
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| 63 | 63 | | company's uncashed check to the company's office in person; or47 |
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| 64 | 64 | | (B) Mails, by insured, certified, or registered United States mail, to the address48 |
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| 65 | 65 | | specified in the contract, a notice of cancellation and includes in such mailing a return49 |
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| 66 | 66 | | of the full amount of disbursed funds in the form of the company's uncashed check or50 |
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| 67 | 67 | | a personal check or certified check or money order;51 |
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| 68 | 68 | | (3) The contract shall contain the initials of the consumer on each page;52 |
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| 69 | 69 | | (4) The contract shall contain a statement that there are no fees or charges to be paid by53 |
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| 70 | 70 | | the consumer other than those referenced in the disclosure forms provided for in Code54 |
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| 71 | 71 | | Section 10-6C-5;55 |
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| 72 | 72 | | (5) The contract shall allow for the cancellation of the contract within a period of 90 days56 |
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| 73 | 73 | | from the death of the consumer by such consumer's heirs, provided that they mail, by57 |
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| 74 | 74 | | insured, certified, or registered United States mail, to the address specified in the contract,58 |
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| 75 | 75 | | a notice of cancellation and include in such mailing a return of the full amount of59 |
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| 76 | 76 | | disbursed funds in the form of the company's uncashed check or a registered or certified60 |
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| 77 | 77 | | check or money order;61 |
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| 78 | 78 | | (6) The contract shall set forth how all charges, including any applicable fees, are62 |
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| 79 | 79 | | incurred or accrued; and63 |
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| 80 | 80 | | (7) If the consumer does not speak English, the contract shall be in the language spoken64 |
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| 81 | 81 | | by the consumer.65 23 LC 49 1256 |
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| 82 | 82 | | H. B. 669 |
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| 83 | 83 | | - 4 - |
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| 84 | 84 | | 10-6C-4.66 |
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| 85 | 85 | | (a) Purchasing companies shall be prohibited from:67 |
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| 86 | 86 | | (1) Intentionally advertising materially false information regarding its products or68 |
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| 87 | 87 | | services; and69 |
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| 88 | 88 | | (2) Contracting for any right to establish the listing or sale price for a property owned by70 |
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| 89 | 89 | | the consumer, which right to make such determinations shall remain solely with the71 |
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| 90 | 90 | | consumer.72 |
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| 91 | 91 | | (b) No future listing right purchase contract shall have a term greater than 30 years from73 |
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| 92 | 92 | | the purchase date.74 |
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| 93 | 93 | | 10-6C-5.75 |
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| 94 | 94 | | (a) All future listing right purchase contracts shall contain the disclosures specified in this76 |
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| 95 | 95 | | Code section, which shall constitute material terms of the contract. Unless otherwise77 |
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| 96 | 96 | | specified, the disclosures shall be typed in at least 12 point bold font in the contract as78 |
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| 97 | 97 | | follows:79 |
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| 98 | 98 | | (1) On the front page of the contract, under an appropriate heading, the contract shall80 |
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| 99 | 99 | | contain language specifying:81 |
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| 100 | 100 | | (A) The purchase price to be paid to the consumer by the purchasing company; and82 |
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| 101 | 101 | | (B) Any amounts the consumer will be required to pay under the terms of the future83 |
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| 102 | 102 | | listing right purchase contract;84 |
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| 103 | 103 | | (2) The body of the contract shall contain the following language:85 |
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| 104 | 104 | | 'Consumer's right to cancellation: you may cancel this contract without penalty or86 |
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| 105 | 105 | | further obligation within five (5) business days after the purchase date if you either:87 |
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| 106 | 106 | | 1. Return to the purchasing company the full amount of the purchase price by88 |
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| 107 | 107 | | delivering the company's uncashed check to the company's office in person; or89 |
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| 108 | 108 | | 2. Mail, by insured, certified, or registered United States mail, to the company at the90 |
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| 109 | 109 | | address specified in the contract, a notice of cancellation and include in such mailing91 23 LC 49 1256 |
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| 110 | 110 | | H. B. 669 |
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| 111 | 111 | | - 5 - |
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| 112 | 112 | | a return of the full amount of the purchase price in the form of the company's92 |
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| 113 | 113 | | uncashed check or a registered or certified check or money order.';93 |
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| 114 | 114 | | (3) The contract shall state that the purchasing company shall have no right to compel94 |
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| 115 | 115 | | a consumer to list, or to decide when or if a consumer should list, his or her home for95 |
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| 116 | 116 | | sale;96 |
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| 117 | 117 | | (4) Located immediately above the place on the contract where the consumer's signature97 |
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| 118 | 118 | | is required, in 12 point bold font with a box around it, the contract shall include the98 |
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| 119 | 119 | | following notice:99 |
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| 120 | 120 | | 'Do not sign this contract before you read it completely. Do not sign this contract if it100 |
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| 121 | 121 | | contains any blank spaces. You are entitled to a completely filled-in copy of the101 |
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| 122 | 122 | | contract before you sign this contract. You should obtain the advice of an102 |
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| 123 | 123 | | attorney.'; and103 |
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| 124 | 124 | | (5) The contract shall state that a copy of the executed contract shall be delivered to the104 |
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| 125 | 125 | | consumer within seven business days from the date the consumer signs it.105 |
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| 126 | 126 | | 10-6C-6.106 |
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| 127 | 127 | | (a) If a court of competent jurisdiction determines that a purchasing company has willfully107 |
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| 128 | 128 | | committed a deceptive and abusive violation of this chapter with regard to a future listing108 |
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| 129 | 129 | | right purchase contract or if a purchasing company fails to register under this chapter, the109 |
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| 130 | 130 | | agreement shall be null and void.110 |
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| 131 | 131 | | (b) Nothing in this chapter shall be construed to cause any future listing right purchase111 |
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| 132 | 132 | | contract conforming to this chapter to be deemed a loan or to be subject to any provisions112 |
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| 133 | 133 | | of law governing loans. A future listing right purchase contract that complies with this113 |
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| 134 | 134 | | chapter is not subject to any statutory or regulatory provisions governing loans or114 |
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| 135 | 135 | | investment contracts. To the extent that this chapter conflicts with any other law, this115 |
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| 136 | 136 | | chapter supersedes any other law for the purposes of regulating future listing right purchase116 |
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| 137 | 137 | | contracts and purchasing companies in the State of Georgia.117 23 LC 49 1256 |
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| 138 | 138 | | H. B. 669 |
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| 139 | 139 | | - 6 - |
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| 140 | 140 | | (c) Nothing in this chapter shall be construed to restrict the exercise of the powers or the118 |
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| 141 | 141 | | performance of the duties of the Attorney General or the Secretary of State, which he or119 |
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| 142 | 142 | | she is authorized to exercise or perform by law.120 |
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| 143 | 143 | | 10-6C-7.121 |
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| 144 | 144 | | (a) A future listing right purchase contract is assignable by the deferred listing company.122 |
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| 145 | 145 | | (b) A future listing right purchase contract may be recorded on the property to which it123 |
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| 146 | 146 | | relates and shall be perfected by recording in the same manner that an easement, mortgage,124 |
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| 147 | 147 | | or other interest in real property is recorded. All recorded documents shall take priority by125 |
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| 148 | 148 | | normal operation of law. Notwithstanding the forgoing, any recorded future listing right126 |
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| 149 | 149 | | purchase contract shall be subordinate to a financing, refinancing, or home equity line of127 |
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| 150 | 150 | | credit the consumer seeks subsequent to the effective date of the future listing right128 |
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| 151 | 151 | | purchase contract.129 |
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| 152 | 152 | | 10-6C-8.130 |
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| 153 | 153 | | (a) Unless a purchasing company has first registered with the Secretary of State pursuant131 |
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| 154 | 154 | | to this chapter, the company may not enter into a future listing right purchase contract in132 |
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| 155 | 155 | | this state.133 |
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| 156 | 156 | | (b) An applicant's registration shall be filed in the manner prescribed by the Secretary of134 |
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| 157 | 157 | | State and shall contain all information determined necessary by the Secretary of State,135 |
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| 158 | 158 | | including, but not limited to, the name of the company, its owners and principal operators,136 |
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| 159 | 159 | | the company's domicile, and, if the company is not domiciled in the State of Georgia, the137 |
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| 160 | 160 | | designation of a registered agent. The initial application must be accompanied by payment138 |
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| 161 | 161 | | of a $7,500.00 fee. A renewal registration must include payment of a $5,000.00 fee.139 |
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| 162 | 162 | | Registrations shall be renewed every two years and expire on September 30.140 |
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| 163 | 163 | | (c) An applicant shall also, at the time of filing such application, file with the Secretary of141 |
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| 164 | 164 | | State, if so required, a bond satisfactory to the Secretary of State in an amount not to142 23 LC 49 1256 |
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| 165 | 165 | | H. B. 669 |
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| 166 | 166 | | - 7 - |
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| 167 | 167 | | exceed $50,000.00. In lieu of the bond, at the option of the registrant, the registrant may143 |
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| 168 | 168 | | post an irrevocable letter of credit. The terms of the bond shall run concurrent with the144 |
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| 169 | 169 | | period of time during which the registration will be in effect. The bond shall provide that145 |
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| 170 | 170 | | the registrant faithfully conform to and abide by the provisions of this chapter and to all146 |
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| 171 | 171 | | rules and regulations lawfully made by the Secretary of State under this chapter and shall147 |
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| 172 | 172 | | pay to any such person or persons any and all amounts of money that may become due or148 |
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| 173 | 173 | | owing to the state or to such person or persons from the registrant under and by virtue of149 |
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| 174 | 174 | | this chapter during the period for which the bond is given.150 |
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| 175 | 175 | | (d) Notwithstanding the prior approval requirement of subsection (a) of this Code section,151 |
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| 176 | 176 | | a purchasing company that registered with the Secretary of State between the effective date152 |
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| 177 | 177 | | of this chapter and the date the Secretary of State made applications available to the public,153 |
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| 178 | 178 | | whichever is later, and 180 days thereafter, may engage in future listing right purchase154 |
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| 179 | 179 | | contracts while the company's registration is pending approval with the Secretary of State.155 |
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| 180 | 180 | | All future listing right purchase contracts entered into prior to the effective date of this156 |
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| 181 | 181 | | chapter shall not be subject to the provisions of this chapter.157 |
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| 182 | 182 | | (e) No purchasing company may use any form of future listing right purchase contract158 |
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| 183 | 183 | | unless it has been filed with the Secretary of State in accordance with the filing procedures159 |
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| 184 | 184 | | set forth by the Secretary of State.160 |
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| 185 | 185 | | (f) The Secretary of State shall be authorized to adopt rules and regulations to implement161 |
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| 186 | 186 | | the provisions of this Code section as needed."162 |
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| 187 | 187 | | SECTION 3.163 |
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| 188 | 188 | | This Act shall become effective on the 180th day after it has been signed by the Governor164 |
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| 189 | 189 | | or becomes law without such approval; provided, however, that it shall not apply to or in any165 |
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| 190 | 190 | | way affect or invalidate any future listing right purchase contract entered into prior to the166 |
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| 191 | 191 | | effective date of this Act.167 23 LC 49 1256 |
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| 192 | 192 | | H. B. 669 |
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| 193 | 193 | | - 8 - |
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| 194 | 194 | | SECTION 4. |
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| 195 | 195 | | 168 |
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| 196 | 196 | | All laws and parts of laws in conflict with this Act are repealed.169 |
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