Flash! Effectively Immediately! New Statutes Enhance Tenant and Homeowner Foreclosure Protections WESTERN CENTER ON LAW & POVERTY PRACTICE TIP: HOUSING On July 8, the Governor signed SB 1137 (Perata, D- Alameda). As "urgency" legislation, the bill took effect immediately, and contains the following provisions. Increased Notice to Tenants. Tenants in residential property subject to an eviction due to a foreclosure must now receive a 60-day notice before an Unlawful detainer may be filed (new CCP Section 1161b). Prior law was 30 days. Tenant Notice of Foreclosure Sale. Current law requires the posting of a Notice of Sale before a foreclosure may take place. Now, a form notice directed specifically at tenants must also be posted and mailed at the same time as the Notice of Sale. The new notice advises tenants that their right to remain in the property may be terminated and to consult an attorney or legal aid office. SB 1137 also requires notice that other laws (e.g., a "just cause" eviction ordinance) may completely preclude eviction. Translations of the notice into Chinese, Korean, Spanish, Tagalog, and Vietnamese are required. Unlike the rest of SB 1137, the operative date of this provision was delayed until 60 days after the bill was signed, i.e., September 6, 2008. Note: Notice is only required for residential properties with mortgage billing address different than the property address; i.e. the property is not owner-occupied. (New Civil Code Sec. 2924.8) Foreclosed Homes Must be Maintained. The bill specifically requires vacant foreclosed residential property to be maintained. Subject to some limitations, a local government entity may impose a fine of $1000/day for failure to maintain the property. There was discussion during legislative hearings about how the bill differed from current local code requirements. SB 1137 defines "failure to maintain" as "failure to care for the exterior of the property, including, but not limited to, permitting excessive foliage growth that diminishes the value of surrounding properties, failing to take action to prevent trespassers or squatters from remaining on the property, or failing to take action to prevent mosquito larvae from growing in standing water or other conditions that create a public nuisance. (New Civil Code Sec. 2929.3.) Owner's Opportunity to Meet with the Lender. SB 1137 generally requires the lender to provide the owner with an opportunity to meet the assess the owner's financial situation and explore options to avoid foreclosure. The meeting offer must be made 30 days prior to the filing of a Notice of Default. The bill contains detailed procedures and time frames for the meeting, which may be done by telephone. Lesser requirements apply if the Notice of Default was filed prior to July 8. These provisions only apply of the loan was made for owner-occupied residential property between January 2, 2003 and December 31, 2007. (New Civil Code Sections 2923.5 and 2923.6.) The provisions of the bill are set to expire on December 31, 2012. The text of the bill is at: www.leginfo.ca.gov/pub/07- 08/bill/sen/sb_1137_bill20080708_chaptered.pdf. Other bills to provide more protections continue to move through the Legislature, including Western Center's AB 2586 (Torrico, D-Fremont). None of these other bills, if enacted, would take effect until January 1, 2009. We will provide an update on all new legislation effective in 2009 in a later Practice Tip.
 

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