AB 506 adds Article 2.5 to the Health and Safety Code to change how dogs, cats, and rabbits may be sold to purchasers located in California. Starting January 1, 2026, the bill makes a transfer-of-ownership contract that includes or requires a nonrefundable deposit void as against public policy when the purchaser is located in California.
It also requires sellers to disclose original source and specified medical information at the time of sale.
The bill creates private and public enforcement mechanisms: affected purchasers can sue to recover money exchanged, seek injunctive relief, and obtain attorney’s fees; state and local prosecutors may bring actions on behalf of the people. Practically, AB 506 narrows sellers’ reservation tools, expands disclosure duties, and raises cross‑jurisdictional compliance and refund logistics for any person, dealer, or business that arranges pet sales while a buyer is in California.
At a Glance
What It Does
The bill voids any contract entered on or after January 1, 2026 to transfer ownership of a dog, cat, or rabbit that includes a nonrefundable deposit when the purchaser is located in California; it also requires disclosure of original source and medical records for those animals at the time of sale.
Who It Affects
Pet dealers, commercial breeders, brokers and online marketplaces that arrange sales to California residents, plus out‑of‑state sellers whose sale is effected while the buyer is in California. Consumers buying dogs, cats, or rabbits in California are the primary protected group.
Why It Matters
AB 506 closes a loophole that let sellers use nonrefundable deposits to lock buyers into transactions and extends disclosure duties to rabbits; it shifts risk and administrative load onto sellers and intermediaries and creates new litigation and refund obligations that compliance teams must address.
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What This Bill Actually Does
AB 506 operates on two parallel tracks: contract invalidation and disclosure. On the contract side, it declares void as against public policy any transfer‑of‑ownership contract for a dog, cat, or rabbit that includes or requires a nonrefundable deposit if the purchaser is located in California and the contract is entered on or after January 1, 2026.
That means sellers cannot rely on nonrefundable deposits to hold an animal or to secure payments when dealing with California buyers; any money exchanged under a void contract becomes recoverable by the purchaser.
On disclosures, the bill folds rabbits into the existing disclosure framework for dogs and cats and requires sellers to provide the animal’s original source and medical information at the time of sale. Although AB 506 references the terms used in the Lockyer‑Polanco and Polanco‑Lockyer statutes rather than rewriting them, the practical effect is that sellers must make the same provenance and health information available for rabbits as they already must for dogs and cats: source details and a record of immunizations, known illnesses, worming or parasite treatments, and veterinary care or medications.Enforcement combines private and public tools.
A purchaser harmed by a violation may sue in any court of competent jurisdiction for recovery of money exchanged under the void contract, injunctive relief, and other remedies the court deems appropriate; prevailing plaintiffs can recover reasonable attorneys’ fees and costs. The Attorney General, county counsel, district attorneys, city attorneys, and city prosecutors may also bring enforcement actions in the name of the people of California.
The bill further requires sellers to refund money within 30 days of receiving notice that the contract is void, and it specifies that purchasers are not required to return the contract subject to the refund.AB 506 includes narrow exemptions: transfers by or to governmental agencies, transfers of specified guide, signal, or service dogs, and transactions involving public animal control agencies or shelters. Those exemptions preserve existing public and special‑purpose transfer channels while targeting commercial sales and brokerage practices that use nonrefundable deposits as lock‑in devices.
The Five Things You Need to Know
Effective date: The rule voiding contracts with nonrefundable deposits applies to contracts entered on or after January 1, 2026.
Scope: The prohibition applies when the sale is offered, negotiated, brokered, or otherwise arranged by a person, pet dealer, or business while the purchaser is located in California, and it covers dogs, cats, and rabbits.
Mandatory disclosures: Sellers must disclose the animal’s original source and medical information (including immunizations, known illnesses, treatments, and veterinary care) at the time of sale.
Remedies and enforcement: Affected purchasers may sue to recover money exchanged, obtain injunctive relief, and recover attorneys’ fees; the Attorney General and local prosecutors can bring civil enforcement actions on behalf of the state.
Refund mechanics: If money was exchanged under a contract declared void, the seller must refund the purchaser within 30 days of notice without requiring the purchaser to return the contract subject.
Section-by-Section Breakdown
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Where the new rules live
AB 506 creates a new Article in the Health and Safety Code that centralizes the new deposit prohibition and disclosure duties. Placing these rules in the same chapter that governs pet dealer obligations signals the legislature’s intent to build on existing pet‑sale oversight rather than create a standalone consumer‑finance statute. For compliance teams, that means cross‑checking the new Article with existing Lockyer‑Polanco and Polanco‑Lockyer requirements — including definitions of “pet dealer” and recordkeeping duties — to understand overlapping obligations.
Void contracts that require nonrefundable deposits
The bill makes any transfer‑of‑ownership contract that includes or requires a nonrefundable deposit void as against public policy when the purchaser is located in California and the contract is entered on or after January 1, 2026. The operative trigger is the purchaser’s location at the time the sale is offered, negotiated, brokered, or otherwise arranged; physical location of the seller is not dispositive. Practically, sellers cannot enforce a nonrefundable deposit clause in civil court and face exposure to refund demands and litigation seeking return of money exchanged under the contract.
Source and medical history disclosure expanded to rabbits
AB 506 compels a person, pet dealer, or business that sells a dog, cat, or rabbit to a purchaser located in California to disclose the animal’s original source and medical information at the time of sale. The bill ties these disclosure duties to the existing medical data elements described in California’s earlier pet protection laws — immunizations, known diseases, worming treatments, veterinary treatments, and medications — which means documentation or credible provenance must pass through to the buyer. Sellers should audit their intake and record systems to ensure they can produce those records at point of sale.
Private right of action plus state and local enforcement
AB 506 authorizes purchasers to sue for recovery of money exchanged, injunctive relief, and other court‑decreed remedies, and it entitles prevailing plaintiffs to reasonable attorneys’ fees and costs. Separately, the Attorney General and specified local prosecuting authorities may bring civil actions in the name of the people. This dual enforcement structure increases the likelihood of litigation and regulatory enforcement, and it elevates the financial stakes for sellers who fail to comply.
30‑day refund obligation without return of contract subject
If a contract is void under the statute and money has already changed hands, the seller must refund the purchaser within 30 days of receiving notice that the contract is void; the bill expressly says the seller cannot condition the refund on the purchaser returning the contract subject (i.e., the animal). That creates practical tension around disentangling refunds from possession and may require sellers to build refund reserves or contractual mechanisms that avoid nonrefundable deposit language while preserving legitimate holding fees that are refundable.
Narrow exemptions and linkage to existing pet laws
AB 506 carves out transfers by or to governmental agencies, specified service/guide/signal dogs, and transactions involving public animal control agencies or shelters. It also situates its disclosure requirements alongside the Lockyer‑Polanco and Polanco‑Lockyer provisions rather than replacing them, so those established duties and civil penalty frameworks remain relevant. Compliance counsel should map how AB 506’s new rules interact with existing licensing, warranty, and disclosure statutes applicable to pet dealers and breeders.
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Who Benefits
- California purchasers of dogs, cats, and rabbits — they gain stronger protections against being locked into sales by nonrefundable deposits and clearer provenance and medical information at the point of purchase.
- Animal welfare organizations and rescue groups — increased transparency and a statutory barrier against opaque brokered transactions can make it easier to trace sources and identify welfare violations.
- Local prosecuting offices and consumer protection units — the bill provides a clear statutory hook for enforcement actions when sellers use nonrefundable deposits or fail to disclose required information.
Who Bears the Cost
- Commercial pet dealers, breeders, and brokers — they lose a commonly used reservation tool and must revamp contracting and accounting to avoid creating voidable contracts and to meet expanded disclosure duties.
- Online marketplaces and intermediary businesses that arrange pet sales to California buyers — they face heightened compliance obligations and litigation risk because the trigger depends on the purchaser’s location during negotiation.
- Small or hobby breeders who rely on deposits to hold litters — these sellers may need new processes to manage holds, refundable deposits, or alternative fees, which could increase administrative burden and cash‑flow risk.
Key Issues
The Core Tension
The central tension is between protecting California buyers from being trapped by nonrefundable deposits and preserving sellers’ legitimate need to reserve animals and manage business risk; the statute favors consumer protection but leaves sellers without clear, statutory safe harbors for refundable holding practices, creating a clash between practical marketplace needs and a strong anti‑lock‑in consumer rule.
Several implementation and legal questions are left open. The bill does not define “nonrefundable deposit,” so disputes will likely arise about whether a given payment is a holding fee, a refundable deposit, a refundable down payment, or an effectively nonrefundable charge disguised by labeling.
Sellers may respond by recharacterizing fees or tightening their refund policies, which risks new litigation over form versus substance.
The statute’s reach — triggered when the purchaser is located in California — raises cross‑border and online‑sale issues. Out‑of‑state sellers and national platforms must track a buyer’s location at the time of offer or negotiation to determine whether the California rule applies, which creates operational complexity and potential conflicts with other jurisdictions’ laws.
The 30‑day refund rule that does not require return of the animal also creates practical complications for disentangling possession from payment and raises questions about repossession, health liabilities, and whether sellers must maintain reserves for refunds.
Finally, AB 506 balances consumer protection against practical business needs but does so without an explicit safe harbor for bona fide, documented refundable holding deposits or an economic‑impact exemption for very small sellers. That omission will push these tradeoffs into court and regulatory guidance, meaning compliance teams must monitor enforcement patterns and be prepared to adapt contracting and recordkeeping practices quickly.
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