Close Compliance (California)

Buying equity from a homeowner in pre-foreclosure is regulated in California, not optional guidance. This SOP is a legal gate: it flags what the law requires before KOD closes on a property in this state, and it makes sure a real attorney has reviewed and approved the contract and disclosure flow before deal #1. This is not legal advice, it's a checklist for confirming legal advice has actually happened.

• Before KOD closes its first deal on a California property, full stop
• Any time the purchase contract, disclosure documents, or the texting/calling setup changes and needs to be re-checked against the attorney-approved version
• Before onboarding a new closer or setter who will be talking to California sellers

• A real estate attorney licensed in California, ideally one already familiar with equity-purchase or foreclosure-consultant transactions
• The current version of KOD's purchase contract and disclosure documents, ready to hand to that attorney for review
• Whoever owns the texting/calling setup (David, per sop-kod-automated-outreach-ghl) is looped in, since quiet-hours and registration requirements below affect that system too

Have a real estate attorney review and approve KOD's purchase contract and disclosure flow before any California deal closes. Don't treat any of the requirements below as a substitute for that review, they exist so you know what to ask the attorney to confirm, not so you can self-certify. Get the sign-off in writing and keep it on file (see VERIFICATION).

1. Civil Code §2945 (foreclosure consultant law) applies to anyone offering services to a homeowner in foreclosure for a fee. Confirm with the attorney whether any part of KOD's outreach or offer structure could be read as a foreclosure-consultant service, and if so, what that triggers.
2. Civil Code §1695 (Home Equity Sales Contracts Act) applies when KOD is the one buying the equity directly. Confirm the attorney has approved:
   • The specific written contract format the statute requires, not a generic purchase agreement
   • The required notices that must appear in and alongside the contract
   • A 5-day right of rescission for the seller, meaning the seller can cancel the deal within 5 days of signing with no penalty. Confirm this right is disclosed clearly and the timeline is tracked on every deal.
   • No upfront fees. KOD does not collect any fee from the seller before or during this transaction. Confirm the contract and any related documents contain nothing that could be read as an upfront charge.
3. DNC and quiet hours. Calls and texts to a California homeowner happen only between 8am and 9pm local time. This applies on top of, not instead of, the DNC-label and litigator-suppression rules already enforced in sop-kod-lead-enrichment and sop-kod-ghl-sync-handoff.
4. SMS registration. Any automated texting to California sellers requires the carrier registration (A2P 10DLC) already called out as a prerequisite in sop-kod-automated-outreach-ghl to be approved, not just submitted, before that workflow goes live.

None of the above is something a closer explains to a seller as legal advice. If a seller asks a legal question at the table, the answer is "let's confirm that with the attorney," not an improvised answer. This SOP flags requirements for KOD's own process; it does not qualify anyone at KOD to give legal advice to a seller.

• A signed, dated attorney sign-off exists on file confirming the purchase contract and disclosure flow comply with §2945 and §1695, before any California deal closes
• The 5-day rescission right is disclosed on every signed California contract and the 5-day window is tracked per deal
• No upfront fee of any kind appears anywhere in the contract or surrounding paperwork
• Every automated call or text to a California number is confirmed to fire only between 8am and 9pm local time
• A2P 10DLC registration status shows approved, not pending, before any automated California texting goes live

• Problem: A California deal is close to signing and there's no attorney sign-off on file yet. Fix: Stop. Do not sign. Get the attorney review completed first; this gate exists specifically to prevent an unreviewed contract from closing.
• Problem: A seller wants to waive the 5-day rescission period to speed things up. Fix: The rescission right is a statutory protection for the seller, not a negotiable convenience. Confirm with the attorney before assuming it can be shortened or waived in any way.
• Problem: Someone suggests covering a "processing fee" or similar charge to the seller to offset closing costs. Fix: No upfront fee to the seller, in any form, on a California equity purchase. Flag this to the attorney immediately if it comes up.
• Problem: A text or call went out to a California number outside 8am to 9pm local time. Fix: Treat it as a compliance incident, not a minor scheduling miss. Check the GHL workflow's timing configuration and the lead's local time zone setting; a missing or wrong time zone is the most common cause.
• Problem: A seller asks a direct legal question at the appointment ("can you actually do this," "is this legal"). Fix: Don't answer it directly. Tell them you'll confirm the specifics with KOD's attorney and follow up, then actually do that.