AB 483: Fixed term installment contracts: early termination fees. - California

09/03/25 - Amended Senate → 09/12/25 - Enrolled · 3 edits · Sep 12, 2025

MINOR

The enrolled version of AB 483 removes a redundant home improvement contract carve-out from Section 17820 and fixes a minor typo. The bill already contained a blanket exemption for home improvement contracts in Section 17850(b), making the specific exception in Section 17820(b) unnecessary. The remaining changes are standard enrollment formatting (removal of line numbers, addition of passage dates and Governor approval block).

SCOPE

Section 17820(b), which allowed home improvement contracts to charge an early termination fee up to the total cost of installed, furnished, or custom ordered goods or services (potentially exceeding the 30% cap), was removed. This provision was redundant because Section 17850(b) already exempts all home improvement contracts from the entire chapter.

TECHNICAL

Fixed a typo in Section 17820: 'total sum for the which' corrected to 'total sum for which.'

Standard enrollment formatting changes: removal of line numbers, addition of Assembly and Senate passage dates (September 10 and 9, 2025 respectively), addition of Governor approval block, and reformatting of the legislative counsel's digest.

10/10/25 - Chaptered → AB483 · 1 edit

MINOR

No substantive policy changes were made between these two versions. The diff reflects only a change in document format: the first version is the officially authenticated chaptered text (with page numbers and traditional legislative layout), while the second is the web-based bill text from the California Legislature website (with navigation menus, search tools, and version history). All legal provisions remain identical.

TECHNICAL

The document was reformatted from the official authenticated chaptered format to the California Legislature website's online bill text format. This added web navigation elements (menus, search boxes, version dropdowns) and removed page numbers and centered headers. No changes were made to any substantive legal language.

09/12/25 - Enrolled → 10/10/25 - Chaptered · 2 edits · Oct 10, 2025

MINOR

AB 483 transitioned from its enrolled bill form to its official chaptered law form (Chapter 557) after being signed by the Governor on October 10, 2025. No substantive policy changes were made between the two versions; the differences are entirely ceremonial and formatting-related, reflecting the standard conversion from a pending bill to an enacted statute.

TECHNICAL

The bill header was replaced with the official chaptered law format: 'STATE OF CALIFORNIA AUTHENTICATED ELECTRONIC LEGAL MATERIAL' and 'CHAPTER 557' with the governor's approval date of October 10, 2025.

Enrolled-bill-specific elements were removed, including the Assembly and Senate passage dates, clerk signatures, and the blank line for the Governor's receipt date and time.

06/12/25 - Amended Senate → 08/19/25 - Amended Senate · 8 edits · Aug 19, 2025

MODERATE

The August 19 Senate amendment to AB 483 pushes the effective date back one month to August 1, 2026, raises the early termination fee cap from 20% to 30%, adds a carve-out for home improvement contracts, broadens the definition of 'seller' by removing the word 'retail,' strengthens disclosure requirements, and adds new provisions preventing waiver of the law's protections and confirming consumers may pay off contracts early.

Scope change

The bill's scope was broadened in two ways: (1) 'retail seller' was changed to 'seller,' extending coverage beyond retail transactions, and (2) a new home improvement contract exception was added that allows higher fees for that specific category. The effective date was also delayed one month.

TIMELINE

Effective date changed from July 1, 2026 to August 1, 2026 for all provisions of the bill.

REQUIREMENT

The cap on early termination fees was raised from 20% to 30% of the total cost of the contract.

Disclosure requirements were strengthened: the contract must now include 'a clear and conspicuous written disclosure' of the fee information, and option (2) now requires a sample calculation demonstrating the highest possible early termination fee under the contract.

A new Section 17840 clarifies that the chapter does not prevent a buyer from paying the full remaining balance of a fixed term installment contract before its maturity, protecting consumers' ability to pay off early.

DEFINITION

The fee cap is now calculated on 'the sum for which the consumer is obligated under the fixed term installment contract, exclusive of the application of the termination fee,' rather than simply 'the total cost of the fixed term installment contract.' This clarifies that the termination fee itself is excluded from the base amount used to calculate the 30% cap.

SCOPE

A new exception for home improvement contracts (as defined in Section 7151.2) allows sellers to charge an early termination fee up to the total cost of installed, furnished, or custom ordered home improvement goods or services at the time of termination, which could exceed the general 30% cap.

The definition of 'fixed term installment contract' was broadened by removing the word 'retail' from 'retail seller,' extending the law's coverage to all sellers rather than only retail sellers.

ENFORCEMENT

A new Section 17860 provides that any waiver of the chapter's provisions is contrary to public policy and void and unenforceable, preventing sellers from contracting out of these protections.

08/19/25 - Amended Senate → 09/03/25 - Amended Senate · 4 edits · Sep 3, 2025

MODERATE

The September 3 Senate amendment to AB 483 makes three substantive policy changes: it raises the maximum early termination fee cap from 20% to 30% of the total contract sum, fully exempts home improvement contracts from the entire chapter (previously they only had a special fee exception), and pushes the effective date back one month from July 1 to August 1, 2026. These changes significantly weaken consumer protections by allowing higher fees and removing an entire category of contracts from coverage.

Scope change

The bill's scope narrowed in two ways: home improvement contracts are now entirely excluded from the chapter rather than just receiving a special fee exception, and the effective date was delayed by one month to August 1, 2026.

REQUIREMENT

The maximum early termination fee cap was increased from 20% to 30% of the total sum for which the consumer is obligated under the contract (Section 17820(a)).

The disclosure requirement in Section 17810(a)(2) was simplified: the old version required 'a sample calculation demonstrating the highest possible early termination fee' while the new version only requires disclosure of 'the formula used to calculate the early termination fee and the highest possible early termination fee under the contract,' removing the explicit sample calculation requirement.

SCOPE

A new Section 17850(b) was added that fully exempts home improvement contracts (as defined in Section 7151.2) from all provisions of the chapter, going beyond the previous limited exception that only allowed higher fees for home improvement contracts.

TIMELINE

The effective date for covered contracts was changed from July 1, 2026 to August 1, 2026, giving sellers one additional month before the new rules apply.

02/10/25 - Introduced → 03/24/25 - Amended Assembly · 5 edits · Mar 24, 2025

MODERATE

The amendment replaces the term 'cancellation fee' with 'early termination fee' throughout, adds formal definitions for key terms including a distinction between voluntary termination and non-payment, expands disclosure options to include a formula-based alternative, and adds a significant exemption for broadband internet providers that comply with federal broadband consumer labeling rules. The changes narrow the bill's practical reach by carving out a major industry sector while tightening the definitional framework.

Scope change

The bill's scope is narrowed by adding a deemed-compliance exemption for broadband internet providers that meet federal labeling standards, effectively removing them from the disclosure requirements. At the same time, the definitional changes clarify that the law targets voluntary early termination specifically and does not apply to situations where a consumer simply fails to pay.

DEFINITION

New definitions added for 'early termination fee' (a fee charged when a consumer voluntarily suspends payments and ends access before the contract term ends), 'termination' (explicitly excludes failure to make payments or other non-performance), and an expanded definition of 'fixed term installment contract' that specifies payments are required during a fixed period until the price is paid in full.

The 20 percent fee cap in Section 17820 now explicitly lists 'an early termination fee' alongside cancellation fees, termination fees, and similar fees, making clear that the new term falls within the cap.

REQUIREMENT

The disclosure requirement in Section 17810 now explicitly states that the explanation must be viewable without reliance on a tooltip, hyperlink, or any feature requiring additional user interaction. This was previously only embedded in one subsection but is now a general requirement applying to all disclosure options.

ELIGIBILITY

A new alternative disclosure option allows contracts to provide 'the formula used to calculate the early termination fee, including a sample calculation demonstrating the highest possible early termination fee under the contract' instead of a flat total cost explanation.

SCOPE

Broadband internet access service providers (and their affiliates and subsidiaries) that comply with federal broadband consumer requirements, including the broadband consumer label under 47 C.F.R. Section 8.2(a), are deemed compliant with the disclosure section for all services sold on their own or as part of a bundle.

03/24/25 - Amended Assembly → 06/12/25 - Amended Senate · 5 edits · Jun 12, 2025

MODERATE

The Senate amendment to AB 483 delays the effective date from January 1, 2026 to July 1, 2026, adds a new exemption for contracts already regulated by state or federal law with greater consumer protections, and simplifies terminology throughout (replacing 'cancellation early termination fee' with just 'early termination fee' and 'retail seller/buyer' with 'seller/consumer'). The changes make the bill easier to understand while narrowing its scope slightly.

TIMELINE

The effective date for all provisions was pushed back six months from January 1, 2026 to July 1, 2026, giving businesses more time to comply.

SCOPE

A new Section 17840 was added providing that the chapter does not apply to fixed term installment contracts already regulated by state or federal law that provides greater consumer protections, such as a prohibition on early termination fees or a lower cap on fee amounts.

Section 17820 was narrowed from prohibiting 'a cancellation fee, termination fee, an early termination fee or any similar fee' to only 'an early termination fee or any similar fee,' removing the separate references to cancellation fees and termination fees.

DEFINITION

The term 'cancellation early termination fee' was replaced throughout with simply 'early termination fee,' and 'retail seller' and 'retail buyer' were replaced with 'seller' and 'consumer' to simplify the definitions.

TECHNICAL

The subsection structure of Section 17810 was flattened from a nested (a)(1)/(b)(2) format to a simple (1)/(2) list, and the 'Termination' definition was restructured into two sentences with the term changed to 'Terminate.'

Fixed term installment contracts: early termination fees.

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