Dear Homeowners,
As we enter 2024, several important changes have been made to California’s foreclosure laws that could impact you. Whether you’re currently facing foreclosure or looking to stay informed, it’s crucial to understand these recent developments.
New Foreclosure Rules Focus on Protecting Homeowners
California continues to be at the forefront of real estate law reform, with several key bills recently passed to increase transparency and prioritize homeownership for individuals. Two important bills—Assembly Bill (AB) 1837 and AB 2170—went into effect in 2023, aiming to make it easier for individual buyers, non-profit organizations, and community land trusts to purchase foreclosed homes.
One of the key changes includes prioritizing “Eligible Bidders” during foreclosure auctions. This group includes prospective owner-occupants, non-profits, and land trusts that focus on creating affordable housing. For the first 30 days after a foreclosure sale, these bidders have priority, giving them a fair chance to purchase homes before larger corporate investors can step in. This move is part of a broader effort to prevent investors from buying up properties in bulk, a practice that has driven up housing prices and limited homeownership opportunities for individuals
Senate Bill (SB) 1079: Continued Protections
SB 1079, originally passed in 2020, has been extended until 2031, reinforcing California’s efforts to slow corporate acquisitions of foreclosed homes. It requires foreclosed properties to be sold individually rather than in bundles, further supporting individuals and community-focused buyers. Additionally, the bill adds enhanced post-foreclosure eviction protections, ensuring that tenants and former homeowners are afforded more time and support in transitioning from foreclosed properties
Penalties for Neglecting Foreclosed Properties
A new provision under SB 1079 imposes increased fines for institutions that fail to maintain foreclosed properties. The fine has been raised to as much as $5,000 per day for properties that remain neglected after 30 days. This policy is designed to ensure that neighborhoods do not suffer from the blight caused by unmaintained properties:
Looking Ahead
With these legal changes in place, California continues to focus on increasing access to affordable housing and protecting individual homebuyers from corporate competition in the foreclosure market. These reforms emphasize the importance of community stability and ensuring that foreclosures do not disproportionately affect low- and moderate-income households.
If you are facing foreclosure, understanding your rights under these updated laws is crucial. If you have any questions or need assistance, contact us at ACE California Law to explore your legal options and protect your home.
Sincerely,
Allison Cecchini Erggelet
Real Estate Attorney, ACE California Law
510-681-0955
