By Gren · September 17, 2026
Start with the thing people are asking about. AB 1850 did not pass.
The bill would have amended Business & Professions Code §10131 and added §10140.9, requiring wholesalers to hold a license and make written disclosures. It was introduced February 11, 2026. It cleared Assembly Business and Professions 19–0 on April 14, 2026. Then on May 14, 2026 it was held under submission in Assembly Appropriations, which is where bills go to stop moving. The house-of-origin deadline has passed. It is not law, it has no effective date, and nothing in it binds you today.
Careful about declaring it dead forever — a gut-and-amend is always possible in Sacramento. But as of now, California has no wholesaling-specific statute in force.
So what is the risk? Two things, neither new: unlicensed brokerage, and the foreclosure rules.
Risk one: the license line
B&P §10130 and §10131 require a license to sell, buy, or negotiate real property for another person for compensation. As a wholesaler you stay clear of that by acting as a principal on your own contract. Assigning your own position is not brokering someone else's property.
Step over the line and §10139 sets the price. Unlicensed activity is punishable by a fine of up to $20,000 and/or up to six months in county jail. For a corporation, the fine runs to $60,000.
California sets no frequency threshold. There is no number of deals that flips you into needing a license, and no number that keeps you safe. It's about conduct. You need a license the moment you act for others — finding buyers for the seller, marketing the property itself rather than your contract, or collecting a fee from either side for putting the deal together.
What a clean California file looks like
Check assignability before anything else. Standard C.A.R. forms require the seller's consent to assignment. Do not assume you can assign a California contract. Either the agreement names the buyer "and/or assignee," or you have the seller's written consent in the file.
Assign contract rights only. The assignment transfers your position under the purchase agreement. It does not transfer the property, because you don't have the property.
Disclose in writing to both sides that you may never take title and that you intend to assign at a profit.
Model clause (seller): Buyer may assign this Agreement for a profit before closing and may never take title. Buyer is acting as a principal, not as Seller's agent or broker.
Be clear about what that clause is. California does not currently require wholesaler-specific disclosures by statute. This is a document that proves you acted as a principal, which is the fact the license question turns on. It's protective, not mandatory.
Then the seller-side statutory disclosures that California does require on the underlying sale: the Transfer Disclosure Statement (Civ. Code §1102 et seq.), the Natural Hazard Disclosure (§1103), and the federal lead-based paint disclosure for pre-1978 homes. These belong in the file regardless of how you exit.
Risk two: foreclosure, and this one has prescribed text
Here is where California stops being relaxed. If a notice of default has been recorded and the seller occupies the one-to-four unit home, you are inside the Home Equity Sales Contract Act, Civ. Code §1695 et seq., and it is a formatting statute as much as a disclosure statute.
What it demands:
- The contract in 10-point bold type, written in the language the deal was negotiated in.
- A 14-point bold heading: NOTICE REQUIRED BY CALIFORNIA LAW.
- A cancellation notice with a detachable form.
- No transfer or assignment of any interest until the cancellation period ends (§1695.6).
Read that last one twice. On a §1695 deal, your assignment is prohibited during the cancellation window. Not risky — prohibited.
The window under §1695.4: the equity seller may cancel until midnight of the fifth business day after signing, or until 8 a.m. on the day of the trustee's sale, whichever comes first. Business days exclude Sundays and listed holidays. Cancellation is by written notice delivered to the address in the contract, in any form — there's no magic wording the seller has to use. After a cancellation, you return the signed documents within 10 days.
And the statute prescribes the notice language itself. This is the text as §1695 has it, not a paraphrase:
"Until your right to cancel this contract has ended, [Name] or anyone working for [Name] CANNOT ask you to sign or have you sign any deed or any other document."
Notice formats are set out in §1695.3 and §1695.5. §1695.8 imposes criminal penalties — we've only checked that against older code text, so confirm the current amounts with a lawyer rather than a blog post, including this one.
California also has foreclosure-consultant rules at Civ. Code §2945 et seq. We haven't reviewed how they interact with a wholesale purchase. If your seller is in default, that's a conversation with counsel, not a checklist item.
The three-day rule that isn't yours
A correction, because this one circulates widely. You'll read that a California seller gets "three or five days to cancel if disclosures aren't received."
That's Civ. Code §1102.3, and it belongs to the buyer, not the seller. If the TDS is delivered after the contract is signed, the buyer may terminate within 3 days of hand delivery or 5 days of mailing. It's a late-delivery remedy on the transfer disclosure, and it has nothing to do with wholesaling.
Two more things that get repeated and shouldn't be:
- There is no wholesaler-specific written disclosure required by California statute right now. Useful, yes. Required, no.
- The transfer disclosure statute is §1102 et seq. — §1102.3 governs delivery timing. Citing §1102.4 alone for the whole scheme is too narrow.
Marketing
Advertise the contract interest, and state that you do not hold title. Stay off the MLS and off public listings that present the property as owned or listed by you. There's no prescribed advertising wording in California because there's no wholesaling statute to prescribe it — which means the only rule governing your ads is the license law, and the license law cares whether you were acting for someone else.
On a §1695 deal, don't market and don't assign during the cancellation window. Full stop.
If AB 1850 ever comes back, advertising is what would change most: it contemplated "does not hold legal title" disclosures in every ad. Worth watching, not worth complying with a bill that isn't law.
Red flags in a file
- An assignment on a C.A.R. form with no written seller consent
- A notice of default recorded on an owner-occupied one-to-four unit home, with no §1695 paperwork
- Any assignment executed during a §1695 cancellation window
- Missing TDS, NHD, or lead-based paint disclosure
- Marketing the property rather than the contract
- A fee taken from the seller or the buyer for making the introduction
The short version
No wholesaling statute. AB 1850 stalled in Appropriations in May 2026 and is not law. The live risks are unlicensed brokerage — $20,000 and up to six months for an individual, $60,000 for a corporation — and the Home Equity Sales Contract Act on foreclosure deals, which prescribes type sizes, exact notice text, a five-business-day cancellation right and a flat bar on assigning during it. The famous 3/5-day rule is the buyer's TDS remedy, not a seller cancellation right.
California is moderate on paper and unforgiving in the corners. Run the numbers first with the free MAO calculator, then find out which corner your seller is standing in.
Cut the noise. Catch the signal.
— Gren
This is general information about California law as of September 2026, not legal advice. Statutes change and facts differ. Before you rely on any of it for a specific deal, talk to a California real estate attorney. Citations: Cal. Bus. & Prof. Code §10130, §10131 and §10139; Cal. Civ. Code §1695 et seq.; Cal. Civ. Code §1102.3.