Corby

Summary

This case concerns a surety bond issued by appellant Gulf Insurance Company pursuant to Business and Professions Code sections 11013.2 and 11013.4. part of the California Subdivided Lands Law. Those statutes provide that it is unlawful for a developer to sell lots or parcels within a subdivision unless the money paid or advanced by purchasers is safeguarded pending transfer of title. The statutes give the developer several options for accomplishing this, one of which is to furnish a bond “to the State of California ... for the benefit and protection of purchasers or lessees of such lots or parcels, in such amount and subject to such terms as may be approved by the commissioner, which shall provide for the return of moneys paid or advanced by any purchaser . . . .” (§ 11013.2, subd. (c); § 11013.4, subd. (b).)

The plaintiff in this case, John Corby, sought to buy a house in a project subject to the Subdivided Lands Law. Gulf issued a bond to the developer. The bond, issued on a Department of Real Estate form under sections 11013.2 and 11013.4, provides that it is “for the benefit and protection of each and every purchaser of any lot or lots within each and every…