SB 1079 California Foreclosure

The California Senate Bill 1079, known as CA SB 1079, was initially in effect on January 1, 2021. At the time it was passed and made into law, the Bill was supposed to address the perceived issue of having large investors buy and convert foreclosed properties to rentals, negatively impacting the ability of residential neighborhoods to be owned by owners instead of investors.

On January 1, 2022, the CA SB 1079 was amended to the foreclosure sale process to permit qualified parties a means to purchase property in foreclosure both at and after the foreclosure sale auction, subject to specific requirements.

Affidavit or Declaration Requirement Under CA SB 1079 Amendment: 

The CA SB 1079 amendment requires that an entity submit a notarized affidavit executed under the penalty of perjury on how and why they meet the requirements to establish that they fall within one of the authorized categories defined in the next section.

The affidavit to be provided under SB1079’s foreclosure sale and post-foreclosure sale bidding structure should include the following information:

  • Contact information of the applicant, which includes name, address, and contact number
  • Statement from the applicant on how they qualify as a prospective owner-occupant, eligible tenant-buyer, or eligible bidder;
  • A statement specifying how the applicant intended to use the property;
  • Copies of any current lease agreement (if any);
  • Copies of the certification or proof of non-profit, 501c3, or qualified agents status, if the applicant is considered a non-profit entity;
  • A statement that the affidavit was executed under the penalty of perjury under the laws of California;
  • A notary signs an affidavit with a notary acknowledgment or jurat language.

Authorized Categories of Entities That Can Participate In the Foreclosure Process Under CA SB 1079 Amendment:

In addition, the CA SB 1079 amendment clarifies the following categories of entities authorized to participate in the foreclosure process:

●    Prospective Owner-Occupant

The amendment clarifies that a prospective owner-occupant is a living person that attests through a declaration to the trustee that they will occupy the property as their primary residence for at least one year and that they are not:

  • The mortgagor or trustor, nor the child, spouse, parent, employee, officer, or member of the mortgagor or trustor;
  • The grantor of a living trust listed in the title to the property when the notice of default was recorded;
  • Someone that has an ownership interest in the mortgagor, unless the mortgagor is a publicly-traded company;
  • Acting as an agent of any individual or entity purchasing the property.

●    Eligible Tenant Buyer

Under the amendment, an eligible tenant-buyer is a natural person who, at the time of the trustee’s sale, is occupying the property as their primary residence under a rental or lease agreement entered into with the mortgagor or trustor before the recording date of the Notice of Default against the property. An eligible tenant-buyer must also not be the trustor, mortgagor, or the child or parent of the mortgagor or trustor.

●    Eligible Bidder

This term is defined as an eligible tenant buyer as described above or a prospective owner-occupant of a property; or one of the following entities:

  • A non-profit entity or cooperative corporation in which an eligible tenant or prospective owner-occupant is a voting member or director.
  • A California-based non-profit corporation whose primary business is the development and presentation of affordable rental housing;
  • A Limited Partnership in which the managing general partner is an eligible California-based non-profit corporation whose primary business is the development and presentation of affordable rental housing;
  • A community land trust as defined in Revenue and Taxation Code Section 402.1(a)(11)(C)(ii)).
  • A limited-equity housing cooperative or workforce housing cooperative trust as defined under California Civil Code Section 817.
  • The state, Regents of the University of California, county, city, district, public authority, public agency, other political subdivisions, or public corporation.

If you are a party to a foreclosure sale in California, don’t hesitate to get in touch with us at Guardian Law Group by calling us toll-free at 855-GUADAN-LAW. Our highly experienced real estate attorney is here to help you understand the amended law and assist you in your foreclosure transaction.

Attorney Elisa Guadan has over 15 years of experience as a licensed real estate agent and over a decade of experience as a real estate attorney. She has facilitated numerous successful real estate transactions for her satisfied clients.

Are you looking for representation for your case? Schedule a Consultation with us today.

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