AMENDED IN SENATE MARCH 24, 2026
CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION
98
Introduced by Senator Archuleta
February 20, 2026
An act to amend add Section 4202 of 9527 to the Commercial Code, relating to commercial secured transactions.
Vote: majority Appropriation: no Fiscal committee: no Local program: no
LEGISLATIVE COUNSEL’S DIGEST
The Uniform Commercial Code-Secured Transactions (UCC) generally regulates the perfection of certain security interests, including a financing statement filed as a fixture filing.
This bill would prohibit the filing of a financing statement against owner-occupied residential real property in a manner that purports to create or otherwise perfect a security interest in, or otherwise encumber, title to that owner-occupied residential real property and would make a person who knowingly files, or causes to be filed, a financing statement in violation of the bill liable to the owner of the owner-occupied residential real property identified in the financing statement, as specified.
This bill would make a nonsubstantive change to this provision.
The people of the State of California do enact as follows:
SECTION 1.
Section 9527 is added to the Commercial Code, to read:
9527.
(a) For purposes of this section, “owner-occupied residential real property” means residential real property that is occupied by an owner of record as the owner’s primary residence at the time the financing statement is filed.
(b) A financing statement shall not be filed against owner-occupied residential real property in a manner that purports to create or perfect a security interest in, or otherwise encumber, title to that owner-occupied residential real property.
(c) A financing statement that describes collateral as including fixtures located on owner-occupied residential real property shall be deemed to create a security interest only in the goods or fixtures described and not in the real property.
(d) A financing statement filed in violation of this section shall be void and of no force or effect with respect to the owner-occupied residential real property.
(e) A person who knowingly files, or causes to be filed, a financing statement in violation of this section shall be liable to the owner of the owner-occupied residential real property identified in the financing statement for all of the following relief:
(1) Actual damages caused by the filing.
(2) Reasonable attorney’s fees and costs.
(3) A civil penalty not to exceed five thousand dollars ($5,000) for each violation.
Section 4202 of the Commercial Code is amended to read:
4202.
(a) A collecting bank shall exercise ordinary care in all of the following:
(1) Presenting an item or sending it for presentment.
(2) Sending notice of dishonor or nonpayment or returning an item other than a documentary draft to the bank’s transferor after learning that the item has not been paid or accepted, as the case may be.
(3) Settling for an item when the bank receives final settlement.
(4) Notifying its transferor of any loss or delay in transit within a reasonable time after discovery thereof.
(b) A collecting bank exercises ordinary care under subdivision (a) by taking proper action before its midnight deadline following receipt of an item, notice, or settlement. Taking proper action within a reasonably longer time may constitute the exercise of ordinary care, but the bank has the burden of establishing timeliness.
(c) Subject to paragraph (1) of subdivision (a), a bank shall not be liable for the insolvency, neglect, misconduct, mistake, or default of another bank or person or for loss or destruction of an item in the possession of others or in transit.