The last legislative session ended with the passage of several new laws concerning California property. Many of these real estate-related statutory amendments and additions will have significant implications for several groups, including homeowner associations, landlords, tenants, property owners, and home buyers. Here are some of the new California real estate laws that could impact you in 2021:
Under SB 1079, effective January 1, 2021, “Eligible Tenant Buyers” and “Eligible Bidders” are now permitted to bid on foreclosed properties containing 1 to 4 single-family residences after a property’s foreclosure sale.
Before this change, foreclosed properties typically went to auction and were sold to the highest bidder. Now, if an auction buyer doesn’t plan to live in a property, an eligible tenant buyer or bidder may be able to get it back from the buyer by submitting a qualifying bid after the sale.
Under SB 1079:
- Trustees can no longer bundle these properties for sale unless the deed of trust or mortgage provides otherwise.
- Tenants must be provided with notice regarding their potential right to purchase a property.
- A tenant buyer will have 15 days after the sale to deliver written notice to the trustee of their intent to bid on the foreclosed property. The tenant buyer’s bid must match the last and highest auction price to outbid the auction buyer.
- Eligible bidders can follow the same steps, except members of this group must exceed the last and highest auction bid.
- The outbidding party must pay for or use a mortgage to secure the foreclosure property no later than the 45th day after the trustee’s sale.
According to the bill, an eligible bidder can be: an eligible tenant buyer, a prospective owner-occupant, certain types of non-profit organizations or groups, a community land trust, a limited-equity housing cooperative, the state, the Regents of the University of California, a county, city, district, public authority, or public agency, and any other political subdivision or public corporation in the state. These provisions in SB 1079 are set to end on January 1, 2026.
SB 1079 also requires that property owners maintain foreclosure properties and increases the penalties for failing to do so. Effective January 1, 2021, owners who fail to maintain these properties can be fined up to $2000 per day for the first 30 days and up to $5000 per day for each day thereafter.