| A blanket
encumbrance is a deed of trust, mortgage, or other lien
or encumbrance (excepting taxes or assessments levied
by public authority) which affects more than one lot or
unit in a subdivision. Section 11013.2 of the Business
and Professions Code mandates protection of a buyer’s
funds unless the lot or unit can be unconditionally released
from the blanket encumbrance. If there is a blanket encumbrance
and the project is not subject to Section 11013.2, a prospective
buyer (or lessee for a period of more than five years)
must receive and sign the following notice prior to the
sale (or lease): BUYER/LESSEE IS AWARE OF THE FACT
THAT THE LOT, PARCEL, OR UNIT WHICH HE OR SHE IS PROPOSING
TO PURCHASE OR LEASE IS SUBJECT TO A DEED OF TRUST,
MORTGAGE, OR OTHER LIEN KNOWN AS A "BLANKET ENCUMBRANCE".
IF BUYER/LESSEE PURCHASES OR LEASES THIS LOT, PARCEL,
OR UNIT, HE OR SHE COULD LOSE THAT INTEREST THROUGH
FORECLOSURE OF THE BLANKET ENCUMBRANCE OR OTHER LEGAL
PROCESS EVEN THOUGH BUYER/LESSEE IS NOT DELINQUENT IN
HIS OR HER PAYMENTS OR OTHER OBLIGATIONS UNDER THE MORTGAGE,
DEED OF TRUST, OR LEASE.
[Date] [Signature of Buyer or Lessee]
(An example of an encumbered project
which is not subject to Business and Professions Code
Section 11013.2 is a subdivision zoned for, and limited
in use to, industrial or commercial purposes.)
When the prospective buyer or lessee receives and executes
the foregoing notice, the buyer or lessee acknowledges
awareness of the blanket encumbrance and the possible
consequences thereof.
Civil Code Section 1133
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