Real Estate Investors Beware of losing House After Auction!

 In Real Estate

1. SB 1079 – Residential Property; Foreclosure

Existing law provides certain requirements that must be satisfied before the exercise of a power of sale under a deed of trust. One requirement is that, if a loan is secured by real property containing 1-4 single-family residences, a notice of sale containing specific information be sent to potential bidders and to the property owner.

SB 1079 requires that the notices of sale additionally provide tenants with notice, and that the notices specify a tenant’s right to purchase the property during foreclosure sales. The law also provides that a trustee cannot bundle properties for sale (each property must be bid on separately), unless the deed of trust provides otherwise.

Additionally, SB 1079 provides an alternative process for trustee’s sales under a power of sale in a deed of trust on real property containing 1-4 single-family residences. The law permits “eligible bidders” to bid on foreclosed properties up to 45 days after the foreclosure sale. Eligible bidders primarily include: (1) the tenant occupying the property, (B) a prospective owner-occupant, and (C) certain non-profits.

Currently, California law requires owners of vacant residential property purchased at a foreclosure sale under a deed of trust to maintain the property. SB 1079 increases the fine for failure to maintain the property to up to $2,000 per day for the first 30 days, and up to $5,000 per day after that.

This law extends through January 12, 2026.

2. SB 1190 – Tenancy; Termination

SB 1190 allows a tenant to terminate a tenancy without penalty if the tenant, a household member, or an immediate family member of the tenant was a victim of a crime that caused bodily injury or death, an act of domestic violence, sexual assault, stalking, human trafficking, or elder abuse. If a tenant exercises its right to terminate a tenancy, the landlord may not keep the security deposit or advance rent.

3. SB 1157 – Tenancy; Credit Reporting; Lower Income Households

Under this new law, a tenant of an assisted housing development (a multifamily rental housing development that receives governmental assistance under certain programs) can now request that the landlord report the tenant’s rental payments to the tenant’s credit agency to increase and build on credit history. The law authorizes landlords to charge tenants the lesser of $10 per month or the actual cost to provide the reporting service. This law does not apply to landlords of assisted housing developments with 15 or fewer dwelling units.

This law is in effect between July 1, 2021 and July 1, 2025.

About the Author

  • Scott Souders
    Scott Souders Attorney & Author


Scott Souders is a real estate attorney who has practiced real estate law in excess of 43 years in Southern California. The Real Estate Law Update cites cases or statutes which are summarized and should not be relied upon without fully reading the cases or statute in the advance sheets and shepardizing the same and consulting with your own attorney.

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