How the New California “Home for Homeowners Not Corporations” Bill Impacts Trustee Sales
On September 28th, Governor Newsom signed into law Senate Bill 1079, referred to as the “Home for Homeowners, Not Corporations” bill. The new legislation alters the process for how foreclosed homes are sold at auction giving tenants, families, local governments, and housing nonprofits an opportunity to buy foreclosed homes before larger private investors. In summary, the legislation calls for:
- A 15-day post-foreclosure right of first refusal to eligible bidders
- Altering the statutory form Notices of Sale
- Prohibiting bundling of properties at sale
- Placing limitations on post-foreclosure evictions of tenants
- Increasing fines for failure to maintain vacant residential property post-foreclosure.
The goes into effect on January 1, 2021 and remains until January 1, 2026.
SB 1079 Explained
SB 1079 requires a foreclosure trustee to consider bids from “eligible tenant buyers” and “eligible bidders” for fifteen (15) days after a trustee’s sale upon receipt of a bid or nonbinding written notice of intent to place a bid. The two parties are defined as follows:
Eligible tenant buyer – the last and highest bidder where funds equal to the highest bid at the trustee’s sale were received by the trustee with a specified affidavit no later than 45 days after the trustee’s sale.
Eligible bidder – the last and highest bidder where funds exceeding the highest bid at the trustee’s sale are received by the trustee with the applicable affidavit no later than 45 days after the trustee’s sale. The list of eligible bidders includes:
- Prospective owner occupants
- Eligible tenant buyers
- Non-profits and business entities with a primary activity of developing and preserving affordable housing
In the case of multiple eligible bidders, the highest bid as of 5:00 p.m. on the 45th day after the trustee’s sale shall be deemed the last and highest bidder pursuant to the power of sale.
The newly passed Senate Bill also amends Civil Code Section 2924h providing that a trustee’s sale shall be deemed final as of the actual date of sale if the Trustee’s Deed Upon Sale is recorded within 18 calendar days after sale. However, where an eligible bidder submits a written notice of intent to bid after sale, the trustee’s sale shall be deemed perfected on the actual date of sale if the TDUS is recorded within 48 calendar days after the sale.
SB 1079 also increases civil fines for property owners after foreclosure who fail to maintain vacant residential property from $ 1,000 to up to $ 2,000 per day for the first 30 days and up to a maximum of $ 5,000 per day thereafter.
The staff and management at Peak Foreclosure Services continues to review and update the process for these upcoming changes.
If you should have any questions, please do not hesitate to contact us.
Stay safe and well!!