Beaumont Tashjian Law Blog

Wednesday, December 9, 2020

Senate Bill 1079 - Foreclosure Proceeding Changes Recently Enacted into Law


Senate Bill 1079, which was recently signed into law, changes practices for the sale of residential units/lots via nonjudicial foreclosure. This new law will be in effect between January 1, 2021 and January 1, 2026, and is intended to help “eligible bidders” (i.e., a tenant currently occupying the foreclosed unit/lot; a person that intends to reside in the unit/lot for no less than one year; and designated nonprofit housing entities) in securing affordable housing. Note, prior law required the notice of sale to contain specified notices to potential bidders and to the property owner. The new law, however, will require the notice of sale to also contain a specified notice to a tenant regarding the tenant’s potential right to purchase the foreclosed property.

Additionally, if a prospective owner occupant is not the last highest bidder, the new law grants eligible tenant buyers rights and priorities to submit bids on the property after the initial trustee sale (i.e., must submit bid 15 days after the sale, and 45 days from the sale date to submit payment which merely has to match the highest bid received at the foreclosure sale). Furthermore, the new law requires a trustee to maintain a functional website and operational telephone number providing information on the property that is available 24 hours a day, 7 days a week. Government entities can impose a fine against owners of vacant properties that were purchased at foreclosure. Per the new law, the fine for owners is now increased from $1,000 per day up to $2,000 per day for the first 30 days that the property is not properly maintained, and up to $5,000 per day thereafter.

At the end of the day, homeowner association boards should evaluate foreclosure options on a case-by case basis. This is so, as boards, with the advise of legal counsel, can determine the best course of action which may include judicial foreclosures. 

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