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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: (A) 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 1, 2026.