AB-1406 • 2026

Attached residential condominium sales: liquidated damages.

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: Ward (A) , Wicks (A) , Wilson
Last action: 2026-01-29
Official status: In Senate. Read first time. To Com. on RLS. for assignment.
Effective date: Not listed

Plain English Breakdown

The official source material does not specify if there are requirements for an accounting of costs and revenues when liquidated damages exceed 6%. This information was removed as it is not supported by the provided text.

Condominium Sales: Liquidated Damages

This law changes how much money a condominium seller can keep if a buyer breaks the contract, increasing the limit from 3% to 6% of the purchase price.

What This Bill Does

Changes the limit on liquidated damages for newly built condominium sales from 3% to 6% of the purchase price.

Who It Names or Affects

People who buy newly built condominiums
Companies that sell newly built condominiums

Terms To Know

Liquidated Damages: A fixed amount of money a buyer must pay to the seller if they break the contract.

Limits and Unknowns

The bill does not specify what happens if liquidated damages are less than 6%.
It is unclear how this change will affect existing contracts or future sales agreements.

Bill History

2026-01-29 California Legislative Information
In Senate. Read first time. To Com. on RLS. for assignment.
2026-01-29 California Legislative Information
Read third time. Passed. Ordered to the Senate. (Ayes 41. Noes 15. Page 3880.)
2026-01-22 California Legislative Information
Read third time and amended. Ordered to third reading. (Page 3816.)
2026-01-15 California Legislative Information
Read second time. Ordered to third reading.
2026-01-14 California Legislative Information
Read second time and amended. Ordered returned to second reading.
2026-01-13 California Legislative Information
From committee: Amend, and do pass as amended. (Ayes 7. Noes 3.) (January 13).
2026-01-06 California Legislative Information
Re-referred to Com. on JUD.
2026-01-05 California Legislative Information
From committee chair, with author's amendments: Amend, and re-refer to Com. on JUD. Read second time and amended.
2025-04-21 California Legislative Information
In committee: Set, second hearing. Hearing canceled at the request of author.
2025-04-02 California Legislative Information
In committee: Set, first hearing. Hearing canceled at the request of author.
2025-03-25 California Legislative Information
Re-referred to Com. on JUD.
2025-03-24 California Legislative Information
From committee chair, with author's amendments: Amend, and re-refer to Com. on JUD. Read second time and amended.
2025-03-24 California Legislative Information
Referred to Coms. on JUD. and B. & P.
2025-02-24 California Legislative Information
Read first time.
2025-02-22 California Legislative Information
From printer. May be heard in committee March 24.
2025-02-21 California Legislative Information
Introduced. To print.

Official Summary Text

AB 1406, as amended, Ward.
Attached residential condominium sales: liquidated damages.
Existing law establishes that for the initial sale of a newly constructed condominium unit, as specified, the amount actually paid to the seller in the event of a buyer’s default pursuant to a liquidated damages provision that exceeds 3% of the purchase price of the residential unit is subject to specified requirements, including an accounting of the seller’s costs and revenues, as specified.
This bill would delete the above-specified percentage and, instead, increase that percentage to
10%.
6%.

Current Bill Text

Read the full stored bill text

Download Bill PDF