b'AB 1079 continued from page 10bidder to remit the bid funds.However,foreclosure trustee with respect to release ofexempt under the provisions of AB 1482. if during this time period, a group of allthe sale proceeds.This extends the lendersExemptions include single family homes eligible tenants bidding jointly through aresponsibility for payments to loan investors,and condominium units if the owner is not representative (tenant group) submits ainsurers, property tax authorities, etc. anda REIT, corporation or LLC in which at least Notice of Intent to Bid and matches the lastsubjects the property to potential damage,one member is a corporation.That being and highest bid at the foreclosure auction,vandalism, and governmental abatementsaid, it remains unclear if a non-exempt new the tenant group can take title to thecitations during this extended period.owner would be required to comply with property from the foreclosing lender or theSecond, there is the potential for extendedthe new eviction restrictions with respect to initially-successful bidder by paying thedelay where the bidders at the sale auctionthe borrower who continues to occupy the equal amount of the high auction bid.Ifor post-sale process fail to consummateproperty.Arguably, the borrower and his or the necessary funds in the amount of thetheir bids in light of the uncertainty or lackher family members would not be considered matching bid are remitted to the trusteeof knowledge of the new post-auctiontenants under an applicable lease.In any within the 45-day period, the tenant groupprocess, and the foreclosure sale must beevent, counsel should be consulted before would be deemed the successful bidder andrenoticed.Third, additional care must bemoving forward with service of any notice to receive title to the property.If the tenanttaken in determining the amount of thevacate/quit in light of these provisions of the group does not remit the necessary funds, thelenders opening and final bid at foreclosureBill, existing local rent control restrictions and highest of the other eligible bidders would beto ensure that the maximum bid amountin light of the potential impact of Assembly the successful bidder to receive the Trusteestakes into account the possibility of a post- Bill 3088s COVID-related non-payment of Deed.The foreclosure trustee is responsibleauction bidder taking title to the propertyrent restrictions.for collecting Notices of Intent, supportingby placing a bid a minimal amount over the affidavits and bid funds to determine theauction bid (or by the tenant group matchingWhat is the potential net effect of the new high bidder in the post-sale auction process,the bid).Finally, there is the potential forpost-foreclosure bid process and the new without the lenders involvement. increased litigation risk as auction bidderseviction requirements?With the potential and post-auction eligible bidders disputethat an investors money could be tied up for If a prospective owner-occupant is the hightheir relative rights under this rushed, new,45 days, it is expected that fewer investors bidder at the sale or if the tenant group matchesand in many ways unclear, statutory process. will competitively bid at foreclosure sales. the high auction bid inside the 15-day period,Unfortunately, this will likely chill the bidding there is no impact to the lender as comparedEnhanced Restrictions on Post- at the foreclosure sale, reducing the amount with the traditional non-judicial foreclosureForeclosure Eviction Rights of excess proceeds and negatively affecting process.Similarly, if no prospective owner- the unfortunate borrowers who just lost their occupant, tenant or other eligible bidderThe Bill creates new Civil Code section 2924n,properties.Further, the complicated post-sale submits a Notice of Intent to Bid inside thewhich provides: Nothing in this article shallbidding process coupled with the need to 15-day period, the traditional high bidderrelieve a person deemedthe legal ownerhave cash on hand within 45 days of the sale process will ensue.In the foregoingof real property when the trustees deed isis likely to scare off most interested owner scenarios, the foreclosing lender will berecorded from complying with applicableoccupant or tenant bidders.Add in that paid out of the sale proceeds, and thelaw regarding the eviction or displacement ofthe unsophisticated eligible bidder will now third party will take title via Trusteestenants, including, but not limited to, noticehave to comply with Californias rent control Deed Upon Sale within 18 days followingrequirements, requirements for the provisionstatute, its hard to envision any tenant or the auction.However, there are severalof temporary or permanent relocationowner occupant willing to take advantage potential impacts to the lender if theassistance, the right to return, and just causeof the new laws.alternative post-sale process is triggeredeviction requirements.What does this within the 15-day period.First, if the post-salemean for lenders or prospective purchasersIncreased Penalties Related to process is triggered by a Notice of Intent toat foreclosure sales? Post-Foreclosure Residential Bid within the 15-day period: Property ConditionWhile there may have been an argument that (1) the lenders ability as the high auctionpost-foreclosure evictions were not subjectAs described in the Legislative Counsels bidder to obtain title to the REO property toto the recently-enacted laws governingDigest of the Bill: This bill would increase the commence rehabilitation and marketing willthe eviction and displacement of tenantsabove-described civil fine to up to $2,000 per be automatically delayed, or (2) the lendersunder 2019s Assembly Bill 1482, this newday for the first 30 days, and up to a maximum ability to receive the third partys foreclosuresection appears to end any dispute.Tenantsof $5,000 per day thereafter, subject to the sale auction proceeds to pay off the loanoccupying property transferred to a newdiscretion of the governmental entity levying may be delayed for at least an additionalowner through the non-judicial foreclosurethe fine.What does this mean for lenders?45 calendar days following the sale auction,process appear to be entitled to these depending on the risk tolerance of theprotections, unless the landlord is otherwisecontinued on page 12Points of InterestWinter 2020/2021Page 11'