California recently enacted a bill, Senate Bill 1079 (SB 1079), which revises certain foreclosure-related requirements in the state.
Pursuant to SB 1079, effective January 1, 2021, foreclosed properties will generally no longer be permitted to be sold in bundles at trustee sales, unless the security instrument provides otherwise. Instead, the bill requires foreclosed properties to be bid on separately. Moreover, eligible bidders (e.g., prospective owner-occupants and eligible tenant buyers) will have 45 day days after a trustee sale to purchase the subject residential property if they can match or exceed the last and highest bid made at the trustee sale. These provisions sunset on January 1, 2026, unless a later enacted statute removes or extends the sunset date.
Additionally, in California, owners of vacant properties that were purchased at foreclosure sales are required to maintain the acquired properties. Currently, government entities can impose a civil fine of $1,000 per day when an owner fails to maintain a purchased vacant property. Pursuant to SB 1079, effective January 1, 2021, government entities will be able to impose a civil fine up to $2,000 per day for the first 30 days that the property is not properly maintained, and up to $5,000 per day thereafter.
Further, in connection with a trustee sale, effective January 1, 2021, SB 1079 requires a trustee to maintain a website and a telephone number to provide certain required information about the trustee sale. Further, SB 1079 requires a security instrument containing a power of sale for a single-family home to include a specified notice informing eligible tenant buyers and eligible bidders of their rights to purchase the property after a trustee’s sale. These provisions sunset on January 1, 2026, unless a later enacted statute removes or extends the sunset date.