2799.1. Subdivision Advertising Criteria.

2799.1. Subdivision Advertising Criteria.
Standards which will be applied by the Real Estate Commissioner in determining whether advertising for sale or lease
of subdivision interests is false, untrue or misleading within the meaning of those terms in Sections 10140, 10177(c),
11022 and 17500 of the Business and Professions Code shall include, but shall not be limited to the following:

(1) Advertising shall not imply a use of a subdivision interest that is not set forth in the Notice of Intention and
Questionnaire comprising the application for a public report or permit.

(2) A subdivision shall not be advertised under a name, designation or appellation that is not set forth in a Notice
of Intention and Questionnaire.

(3) A subdivision shall not be advertised by a name or trade style which implies, contrary to fact, that the subdivider
or his agent is a bona fide research organization, public agency, nonprofit organization or similar entity.

(4) No improvement, facility or utility service may be advertised unless it has been completed or installed and is
available for use, or unless completion and availability for use are assured through bonding or other arrangements
approved by the commissioner. If not completed, the estimated date of completion shall be set forth in the
advertising.

(5) There shall be no reference to the prospective availability of private facilities outside of the subdivision for the
use and enjoyment of purchasers of subdivision interests if the facilities are to be constructed or installed by the
subdivider or an affiliated entity unless financial arrangements for completion or installation have been approved
by the commissioner.

(6) There shall be no reference to proposed or uncompleted private facilities over which the subdivider has no
control unless the estimated date of completion is set forth and unless evidence has been presented to the
commissioner that the completion and operation of the facilities are reasonably assured within the time represented
in the advertisement.



(7) Unless the facilities and improvements listed below have been completed, or unless financial and other
arrangements for completion have been made, subdivided land offered for residential use shall not be described as
“improved”, “developed”, or by similar terms without disclosure of any facility or improvement listed below that
is not included in the offering:
(A) Paved roads within the subdivision.
(B) A potable water system.

(C) A sewage system.
(D) A source of electricity at the building site.
(8) Reference shall not be made to a proposed public facility or project which purports to affect the value and utility
of subdivided lands without a disclosure of the existing status of the proposed facility based upon information
supplied or verified by the authority responsible for the public facility or project.
(9) A subdivider shall not advertise the availability of financing for on-site construction unless he has a bona fide
written expression of an intention to finance such construction by a recognized lender or unless the subdivider has
established to the satisfaction of the commissioner that financing of on-site construction will be provided by a source
other than a recognized lender.
(10) Pictorial or illustrative depictions of the subdivision and surrounding lands must accurately portray the land as
it exists and proposed improvements as they will be constructed.

(11) Pictorial or illustrative depictions other than unmodified photographs shall bear a prominent disclosure
identifying the nature of the depiction, e.g., ARTISTS CONCEPTION and a legend identifying those improvements
which are not then in existence.
(12) If a map or diagram is used to show the location of the subdivision in relation to other places, actual road miles
from each other place to the subdivision shall be shown or the map or diagram shall be prepared to scale and shall
include a scale of miles.
(13) If there is advertising of streets, roads, sewers, storm drains or other utilities which have not been accepted for
maintenance by a public entity, that fact must be disclosed in the advertising. Rights-of-way for passenger vehicles
to a subdivision or to lots within a subdivision which have not been accepted for maintenance by a public entity
shall be adequately described in terms of roadbed and surfacing.
(14) If the existence of a lake, river, canal or other body of water, which is subject to a fluctuating water level other
than through natural causes, is advertised as a feature of the subdivision, any significant effect of the fluctuation
upon the use of the water facility and upon the subdivision interests shall be described.
(15) No advertisement shall imply that a facility is available for the exclusive use of purchasers of subdivision
interests if a public right of access or of use of the facility exists.
(16) There shall be no reference to the availability for use by owners of subdivision interests of private clubs or
facilities in which an owner will not acquire a proprietary interest through purchase of a subdivision interest without
an accompanying disclosure that the existence of the facilities and their availability for use by subdivision interest
owners are at the pleasure of the owner of the facility.
(17) An advertisement of any facility in which a purchaser will acquire a proprietary interest with his purchase of a
subdivision interest must set forth the estimated costs and other obligations of the purchaser with respect to the
facility or shall refer the purchaser to a fact sheet or similar source of this information.
(18) No representation may be made that subdivision interests being offered for sale can be further divided unless
a full disclosure is included as to the legal requirements for further division of the interests.

(19) Subdivision interests may not be advertised as available at a particular minimum price if the number of
subdivision interests available at that price comprise less than 10% of the unsold inventory of the subdivider, unless
the number of lots then for sale at the minimum price is set forth in the advertisement.
(20) Advertising of a discounted purchase price shall not be made unless the subdivider has established base prices
for application of the discount through a substantial number of sales at base prices.



(21) A prospective increase in the price of a subdivision interest other than an interest offered with an on-site
residential, commercial or industrial structure may not be implied nor shall a price increase of such a subdivision
interest be announced more than sixty days prior to the date that the increase will be placed into effect.

(22) If the phrase “closing costs only” or similar terminology is used to describe the price of a subdivision interest,
the estimated dollar amount of the costs must be set forth in the advertisement.
(23) The total amount of any special bonded indebtedness, or the range of such bonded indebtedness, against the
subdivision interests shall be set forth in any advertisement which states or implies that off-site improvements for
the subdivision have been completed and paid for in connection with the development of the project. If the selling
price of a subdivision interest is advertised, the special bonded indebtedness against that subdivision interest shall
be given equal prominence with the selling price unless the bonded indebtedness is included in the advertised selling
price.

(24) No representation shall be made as to the availability of a resale program offered by or on behalf of the
subdivider unless the resale program has been made a part of the offering as submitted to the commissioner.

(25) An asterisk or other reference symbol may be used to explain, but not to contradict or to change the ordinary
meaning of the material in the body of the advertisement.

(26) Unless an offer made in connection with a sales promotion is unequivocally without conditions, the terms
“free”, “no obligation” or terms of similar import may not be used to describe that which is offered.
(27) Offers of travel, accommodations, meals or entertainment at no cost or reduced cost, the purpose of which is
to promote sales, shall not be described as “awards”, “prizes” or by words of similar import.
(28) Offers or solicitations of trip reservations to visit subdivided property or any other place where a sales
presentation for subdivided property is to be made shall set forth all conditions, limitations or qualifications that
will be applied before the recipient will be allowed to make the trip.

(29) The approximate retail value of any gift, prize or premium offered through an advertisement to prospective
purchasers shall be set forth in the advertisement.

(30) Complete rules and procedures for any contest or drawing advertised in connection with the marketing of
subdivision interests shall be included in the advertisement, or the advertisement shall state the means by which a
person can secure full information concerning said rules and procedures prior to his participation in the contest or
drawing.

(31) Advertising shall not include testimonials or endorsements which contain matters which the subdivider would
be precluded by law or regulation from making in his own behalf.

(32) An offer or inducement to purchase which purports to be limited as to quantity or restricted as to time shall set
forth the numerical quantity and/or time applicable to the offer or inducement.

(33) An advertisement or an offering of undivided or fractional interests in a subdivision, which does not include a
right of exclusive ownership or occupancy of a particular lot, parcel or unit by the purchaser, shall disclose the total
number of undivided or fractional interests to be offered for sale in the subdivision.
(34) If the subdivision offering involves something less than a fee interest with an exclusive and perpetual right to
occupy a lot, parcel or unit, e.g., a leasehold or time-sharing-ownership interest, the limitations and restrictions on
occupancy rights shall be included in the advertisement or the advertisement shall refer the purchaser to a fact sheet
or similar source of this information.
(35) No direct mail advertisement purporting to have resulted through a referral shall be used unless the solicitation
includes the name of the person making said referral.
(36) Investment merit or profit potential of a subdivision interest other than an interest which is offered with an on-
site residential, commercial or industrial structure shall not be expressed or implied unless the commissioner has
determined from evidence submitted by or on behalf of the subdivider that the representation is neither false nor
misleading.
(37) Statements appearing in the public report for a subdivision shall not be quoted, paraphrased or cited out of
context nor shall any part of the public report be underscored, italicized, bold faced or otherwise highlighted except
in strict conformance with highlighting in the public report itself.