Action Alert: New Standards for Contract Translation in California

Anyone who has purchased a home knows that the assortment of documents you have to sign during the application process and at the closing table makes up a daunting pile of paper. It's impossible to read it all on the spot, much less understand all the legalese, so most people rely on the guidance of a realtor or buyer's agent and hope everything turns out for the best. You may even walk away holding the keys to your new home and wonder if you just signed over the rights to your firstborn…
 
So imagine the confusion, frustration, and opportunities for fraud that exist when someone who doesn't speak English is asked to sign English documents! Surprisingly, this happens more often than you might think.
 
The Department of Housing and Urban Development (HUD) issued a Final Guidance on January 22, 2007 regarding limited-English proficient (LEP) clients. Recipients of federal money, including providers of Section 8 housing, must assess the language needs in their area and provide language assistance where appropriate. This includes translation of vital documents such as lease and purchase contracts, settlement statements, and informational brochures, as well as oral interpretation.
 
However, there is no federal regulation or standard for making real estate documents and contracts translated for everyone who needs language assistance, not just Section 8 recipients.
 
According to data from the United States Census of 2000, of the more than 12 million Californians who speak a language other than English in the home, approximately 4.3 million speak an Asian dialect or another language other than Spanish. The top five languages other than English most widely spoken by Californians in their homes are Spanish, Chinese, Tagalog, Vietnamese, and Korean. Together, these languages are spoken by approximately 83 percent of all Californians who speak a language other than English in their homes.

That's why California Assemblyman Paul Fong introduced legislation in 2009 to help protect speakers of these languages. He said, "For most consumers, mortgages are the largest and most complex financial transactions of their lives. For many non-English speakers, failure to translate the documents results in limited or an incorrect understanding of key loan terms like interest rate adjustments and prepayment penalties. As a result, many end up with excessively costly loans or loans that will result in high levels of default and foreclosure."¹
 
Assembly Bill 1160 was subsequently passed, which says that if negotiations for a real estate transaction are conducted in Spanish, Chinese, Tagalog, Vietnamese, or Korean, the borrower must be given a written translation of the contract and/or the appropriate disclosures and forms. If there are any substantial revisions to the contract, then these revisions must be translated as well. When the terms of the contract are negotiated through an interpreter, these regulations do not apply.

AB 1160 took effect on January 1, 2010, which means that any mortgage lender or real estate broker conducting business in California (except federally chartered bank and credit unions) must comply with these rules or face possible fines as well as payment of up to 50% of damages incurred.

With this in mind, it would be wise for everyone affected by this law to select a professional provider for their translation needs. Even though the law states that people using an interpreter during negotiations do not need to have documents translated, it would be wise to err on the side of caution.

HUD even acknowledges that skilled interpreters such as friends or family members might not be the best people to read an English contract and translate it properly , saying on their LEP page, “The skill of translating is very different than the skill of interpreting and a person who is a competent interpreter may not be a competent translator. To ensure the quality of written translations and oral interpretations, HUD encourages recipients to use members of professional organizations.”²

Avantpage Translations, based in California, provides a reliable, quality translation solution for any organization that needs documents turned around quickly. When using Avantpage, you have the advantage of starting new projects, downloading completed files, and asking questions via their secure, online project management system. Also, by using Avantpage, you can have a Translation Memory database built of the terms and phrases you most use, so translators spend less time working on your documents in the future (thereby providing cost savings.)

Already a preferred provider for healthcare organizations in California, Avantpage is prepared to help real estate lenders and brokers achieve full compliance with AB 1160. Access their experts in Spanish, Chinese, Tagalog, Vietnamese, and Korean by contacting them today at 1-877-ANY-LANG.

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 References
 
1. Ross, Michael. "New Year Brings Protection to Consumers Who Speak Foreign Languages, Enter Into Contracts." Sacramento Government Examiner, 12/15/09
2. http://www.hud.gov/offices/fheo/promotingfh/lep-faq.cfm