Dear Associates:
The following are brief summaries of bills chaptered in the 2024 legislative session that have an impact on, or are of interest to, our industry. Unless otherwise specified, the chaptered bills discussed in this bulletin went into effect on January 1, 2025. If you would like to read the complete text of any of the chaptered bills summarized below, you may access them on this website.
Chapter 7 (SB477) – Accessory Dwelling Units
This Act was an urgent measure and became effective upon being chaptered on March 25, 2024.
The purpose of this Act was simply the reorganization and consolidation of existing sections of law governing ADUs and JADUs into a single Chapter with only non-substantive changes to existing statutory cross references to the new corresponding sections of the law, for purposes of making the existing ADU and JADU statutes easier to navigate in a single Chapter, ensuring that implementation of existing law is less cumbersome.
This Act moved Government Code Sections 65852.150, 65852.2, 65852.22, 65852.23, and 65852.26 relating to ADUs and JADUs into a single Chapter (Chapter 13, commencing with Section 66310) within Division 1 of Title 7 of the Government Code relating to land use.
Note that as a result of this consolidation, Government Code Sections 65852.150, 65852.2, 65852.22, 65852.23, and 65852.26 were repealed in their entirety.
Two other Accessory Dwelling Units bills were chaptered as Chapter 296 and Chapter 834.
Chapter 123 (AB 3288) – Property Taxation
This Act amended Sections 3695 and 4675 of the Revenue and Taxation Code, relating to taxation.
The first revision is in connection with the date on which an objection to a tax sale can be lodged by any taxing agency’s governing body. Existing property tax law provides that the taxing agency has consented to a tax sale if any taxing agency’s governing body does not, before the date of the sale, file with the tax collector and the board of supervisors certified copies of a resolution objecting to the sale, as described. This bill now requires that certified copies of a resolution objecting to the tax sale be filed before the date of the first publication of notice of the intended sale. Basically, the date by which a valid objection can be filed can never be on or after the date of the first publication of notice of the intended sale.
The second revision is in connection with establishing the date on which the county receives a claim for excess proceeds after a tax sale. Existing property tax law authorizes that a party of interest in property sold at a tax sale resulting in surplus funds, can file a claim with the county for the excess proceeds, provided that the filed claim was postmarked on or before the one-year expiration date of the recordation of the tax collector’s deed. This bill additionally establishes how the claim is to be sent and the date on which service of the filed claim is considered to have been filed with the county, by requiring that the claim be either (i) deposited in the United States mail in a sealed envelope, or (ii) deposited for shipment with an independent delivery service in a sealed envelope or package, as specified, and would be deemed to have been filed as of the date shown by the post office cancellation mark stamped upon the envelope containing the claim, or on the independent delivery service shipment date shown on the packing slip or air bill attached to the outside of the envelope or package containing the claim. If a claim deposited in the United States mail does not contain an official postmark, the date of filing would be the date received by the county treasurer-tax collector’s office.
Two other Property Taxation bills were chaptered as Chapter 498 and Chapter 566.
Chapter 142 (AB 295) – Foreclosure
This Act amended a number of Civil Code sections relating to non-judicial foreclosures and was passed as an urgent measure that took effect immediately upon it becoming chaptered on July 18, 2024. The affected code sections were revised as to the following provisions:
A. Extended liability protection to trustees responding to requests for payoff or reinstatement information regarding the nature and the amount of the default under the secured obligation, deed of trust, or mortgage or for any good faith error resulting from reliance on information provided to the trustee by the beneficiary concerning the amount or nature of the default. These actions are also recognized as not being subject to Title 1.6c addressing Fair Debt Collection Practices.
B. Section 2924.21 is added to prohibit any person from contacting, soliciting, or initiating communication with an owner to claim the surplus funds from a foreclosure sale of the owner's residence before 90 days after the trustee's deed has been recorded. This Act was meant to discourage fraudulent “surplus chasing” by third parties acting for an exorbitant fee on the borrower’s behalf by allowing the trustee time to comply with state law in disbursing surplus funds after the foreclosure is final.
C. A trustee is now permitted to recover reasonable costs and expenses that were not only incurred but also those that will be incurred as a direct result of outstanding payment obligations being paid by the mortgagor to cure the default, which now also includes the recording of a notice of rescission.
D. The maximum allowable cost incurred in connection with a postponement was increased from $50 per postponement to $100 per postponement.
E. With respect to Eligible Tenant Buyers under 2924m submitting a bid to the trustee that would deem the trustee’s sale final, the unnecessary requirement that a valid bid be limited to a single bid amount and not contain instructions for successive bid amounts, was stricken, but was added as an additional requirement for valid bids made by other Eligible Bidders during the 45-day period after the trustee’s sale, as specified.
F. Existing law requires that the trustee attach to the trustee’s deed a copy of the affidavit or declaration required from an Eligible Bidder, as specified. If the winning bidder was not required to submit the affidavit or declaration to the trustee, the trustee is now required to attach as an exhibit to the trustee’s deed, a statement that no affidavit or declaration is required under Civil Code Section 2924m, and the lack of an affidavit or declaration shall not prevent the deed from being recorded and shall not invalidate the transfer of title pursuant to the trustee’s deed.
G. Clarifies that title to the property shall remain with the mortgagor or trustor or successor in interest until the sale of the property is deemed final, as specified.
H. Among other requirements, a copy of the trustee’s deed is required to be electronically sent to the Attorney General within 15 days of the sale being deemed final. That provision was recast from it being a recorded copy to that of an executed copy.
Chapter 311 (AB 2424) - Foreclosure
This Act amends certain sections of the Civil Code relating to the Homeowner’s Bill of Rights (HBOR) and non-judicial foreclosures on real property.
The affected code sections were revised as to the following provisions:
A. Under existing law, a mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent shall not record a notice of default until there has been due diligent attempts by the mortgage servicer to contact the borrower, as specified.
Sections 2923.5 and 2923.55 of the HBOR are amended to additionally require that the mortgage servicer shall notify the borrower either during the initial statutory in person or telephonic contact, or by inclusion in the statutory “due diligence” first-class letter sent to the borrower, that a third party, such as a family member, HUD-certified housing counselor, or attorney, may record a request to receive copies of any notice of default and notice of sale pursuant to the process described in Section 2924b and that receiving a copy of these documents may allow the third party to assist the borrower in avoiding foreclosure. Additionally, Section 2932.2 was also added to the Civil Code requiring that a mortgagee, beneficiary, or authorized agent provide the borrower with written disclosure of this new notice before signing the mortgage or deed of trust.
B. A non-judicial foreclosure on a residential real property containing no more than four dwelling units shall not be conducted until the expiration of an additional 45 days following the scheduled date of sale if the trustee receives from the borrower at least five business days before the scheduled date of sale, a listing agreement with a California licensed real estate broker, as specified. Postponement of the sale in connection with this new listing agreement provision cannot occur more than once, however if the trustee receives, at least five business days before the postponed scheduled sale date, a copy of a purchase agreement for the sale of the property, the trustee shall postpone the scheduled date of sale for at least another 45 days after the date on which the purchase agreement was received by the trustee, as specified. Postponement of the sale in connection with this new purchase agreement provision cannot occur more than once.
C. A non-judicial foreclosure on a first lien deed of trust on a residential real property containing no more than four dwelling units shall not be sold at the trustee’s sale for less than 67% of the fair market value of the property. The fair market value, as specified, shall be provided to the trustee by the mortgagee, beneficiary, or authorized agent at least 10 days prior to the initially scheduled date of sale, with no duty on the part of the trustee to verify the source or accuracy of the valuation. If the property remains unsold after the initial trustee’s sale, then the trustee shall postpone the sale for at least 7 days at which time the property may be sold to the highest bidder. This new provision shall apply to the initial trustee’s sale for each notice of sale issued, however failure to comply shall not affect the validity of a trustee’s sale or a sale to a bona fide purchaser for value.
Chapter 331 (AB 2016) - Probate
This Act amended Probate Sections 13100 and 13101 relating to Affidavit Procedure for Collection or Transfer of Personal Property by excluding not only property held under a right of survivorship or in a trust when evaluating the gross value of the decedent’s real and personal property, but also additionally excluding any property included in a petition filed under Section 13151.
This Act also amends a number of Probate Code Sections relating to the filing of a petition requesting a court order determining petitioners’ succession to real property in lieu of a proceeding for the administration of the decedent’s estate by revising the petition procedures to apply only to real property that was the decedent’s primary residence in this state having a gross value that does not exceed $750,000 or the amount specified by Judicial Counsel after review, as specified. This Act also requires a successor who files a petition to deliver notice of the petition to each heir and devisee named in the petition and also specifies that, for these purposes, “primary residence” is not limited to the decedent’s residence at the time of death.
Chapter 431 (AB 3100) – Mortgages and Deeds of Trust
This Act added Section 2951 to the Civil Code, relating to a new provision in certain mortgage loans. Under this Act, a conventional home mortgage loan originated on or after January 1, 2027, and secured by owner-occupied residential real property containing 4 or fewer dwelling units with multiple borrowers, is now required to include provisions allowing for an existing borrower on the loan to purchase the interest and assume the loan of that portion of another borrower on the loan, in connection with a decree of dissolution of marriage, a legal separation agreement, or an incidental property settlement, if the assuming borrower qualifies, as determined by the lender.
Chapter 475 (SB 1399) – Transfer Fees
This Act amends Section 1098.6 of the Civil Code, relating to transfer fees.
This Act creates an exception to the existing prohibition on the creation of private transfer fees after January 1, 2019, for transfer fee covenants created pursuant to an agreement entered into before June 1, 2009, and which meets additional narrow and specific criteria, as specified.
Chapter 516 (AB 2992) – Buyer-Broker Agreements
This Act amends sections of the Business and Professions Code, Civil Code, and the Code of Civil Procedure, relating to real estate. This Act also adds Section 1670.50 to the Civil Code.
Existing law requires that agreements providing for the amount of compensation to be paid to a real estate licensee for the sale of specified residential property or a mobile home contain a statement that the amount or rate of real estate commissions is not fixed by law but rather is set by each broker individually and may be negotiable between the seller and the broker. This Act requires that the same statement be contained in agreements providing for the amount of compensation to be paid to a real estate licensee for the purchase of specified residential property or a mobile home.
This Act also requires that a buyer’s agent and a buyer execute a buyer-broker representation agreement as soon as practicable, but no later than the execution of the buyer’s offer to purchase real property. The Act defines a buyer-broker representation agreement as a written contract between a buyer and a buyer’s agent by which the buyer’s agent has been authorized to provide specified services for or on behalf of the buyer under the contract. The Act specifies that a buyer-broker representation agreement is:
i. to include specified terms and require that the buyer’s agent provide the buyer a specified disclosure prior to execution of the agreement.
ii. prohibited from lasting longer than 3 months from the date the agreement was made, except if the agreement was entered into between a real estate broker and a corporation, limited liability company, or partnership.
iii. prohibited from renewing automatically and would require a renewal of the agreement to be in writing and be dated and signed by all parties to the agreement.
iv. prohibited from lasting longer than 3 months from the date a renewal was made.
v. void and unenforceable if it violates these durational and renewal requirements.
This Act provides that a violation of the provisions in this Section by a licensed person under the Real Estate Law is also a violation of that person’s licensing law.
Existing law requires a buyer’s agent to provide the purchaser with a copy of the disclosure form specified under Section 2079.16 of the Civil Code as soon as practicable before execution of the buyer’s offer to purchase. This Act requires that the disclosure form be provided to the buyer as soon as practicable before execution of a buyer-broker representation agreement and execution of the buyer’s offer to purchase.
Existing law requires that any agreement between a principal and an agent in a real property sales transaction contain a provision requiring binding arbitration of any dispute between the principal and agent in the transaction, the agreement is required to display that provision in a specified manner with specified explanatory language. This Act extends the requirement to buyer-broker representation agreements.
Chapter 517 (AB 3108) – Mortgage Fraud
This Act amends Section 4973 of the Financial Code and Section 532f of the Penal Code.
Existing law prohibits mortgage fraud, including, without limitation, making any misstatement, misrepresentation, or omission during the mortgage lending process with the intention that it be relied on by a mortgage lender, borrower, or any other party to the mortgage lending process, and filing or causing to be filed with the recorder of any county in connection with a mortgage loan transaction any document that is known to contain a deliberate misstatement, misrepresentation, or omission, and with the intent to defraud.
Under the Penal Code, this Act also added to the definition of mortgage fraud, if a mortgage broker or loan originator, with intent to defraud, the person (i) instructs or otherwise deliberately causes a borrower to sign documents reflecting the terms of a business, commercial, or agricultural loan, with knowledge that the borrower intends to use the loan proceeds primarily for personal, family, or household use, or (ii) instructs or otherwise deliberately causes a borrower to sign documents reflecting the terms of a bridge loan, with knowledge that the loan proceeds will not be used to acquire or construct a new dwelling. Additionally, a person commits mortgage fraud if, with the intent to defraud, the person files or causes to be filed with the recorder of any county in connection with a mortgage loan transaction any document the person knows to contain, instead, a material misstatement, misrepresentation, or omission.
Under the Financial Code, this Act additionally prohibits a person who originates a covered loan from avoiding, or attempting to avoid, the application of the law regulating the provision of covered loans by committing mortgage fraud as defined by Section 532f of the Penal Code.
Chapter 551 (AB1785) - Privacy
This Act amends Government Code Section 7928.205.
This revision to the Government Code expanded and clarified the prohibition of a state or local agency from posting certain information of any elected or appointed official on the internet without first obtaining the written permission of that individual. That expansion of prohibited information now includes and clarifies it to be the public posting of the home address, telephone number or both the name and assessor parcel number associated with the home address of any elected or appointed official.
Chapter 591 (SB 347) – Subdivision Map Act
This Act amends Section 66412 of the Government Code, relating to the Subdivision Map Act (SMA).
This amendment to the SMA adds an additional exemption from the requirements of the SMA in connection with the leasing or granting of an easement in conjunction with a hydrogen fueling station or an electric vehicle charging station (as defined in Section 65850.7), if the project is subject to discretionary action by the advisory agency or legislative body.
Chapter 601 (SB 1146) - Mortgages and Deeds of Trust
This Act amends Civil Code Section 1916.1, relating to the broker exemption from restrictions upon rates of interest.
In addition to exempting a loan arranged by any person licensed as a real estate broker from the restrictions upon rates of interest contained in Section 1 of Article XV of the California Constitution, this Act added to the exemption, a broker arranged forbearance, extension, or modification of a loan, as specified.
Note: Any affirmative coverage regarding Usury is an extra-hazardous risk and requires approval from a Stewart Title Guaranty Company underwriter.
This Act was a comprehensive bill that also amended a number of other Civil Code sections, including ones related to the Homeowner’s Bill of Rights (HBOR).
A. Under existing law, the provisions in connection with foreclosure prevention alternatives under Civil Code Sections 2923.7 and 2924.18, exempt certain entities and persons that, during their immediately preceding annual reporting period, as established with their primary regulator, foreclosed on 175 or fewer residential real properties, containing no more than 4 dwelling units.
In connection with Section 2923.7, existing law requires mortgage servicers to establish a single point of contact when a borrower requests a foreclosure prevention alternative, as specified.
In connection with Section 2924.18, existing law prohibits a mortgage servicer, trustee, mortgagee, beneficiary, or authorized agent from recording a notice of default, notice of sale, or conduct a trustee’s sale during a pending modification application of a first lien loan modification until written determination of eligibility has been provided by the mortgage servicer to the borrower, as specified.
This Act amended Sections 2923.7 and 2924.18 to additionally exempt from those provisions, a person or entity that makes and services seven or fewer loans for the purchase of residential real property in a calendar year.
B. Under Civil Code Section 2924.15, existing law provides that specified Civil Code Sections only apply to a first lien mortgage or deed of trust that meets either of 2 conditions: (1) the first lien mortgage or deed of trust is secured by owner-occupied residential real property containing no more than 4 dwelling units, or (2) the first lien mortgage or deed of trust is secured by residential real property that is occupied by a tenant, that contains no more than 4 dwelling units, and that meets certain conditions.
This Act removed the 2nd condition.
C. After a default has been cured by the trustor, mortgagor, or other person authorized to do so, existing law under Civil Code Section 2924c, requires the beneficiary or mortgagee to reinstate the loan and, within 21 days following the reinstatement, execute and deliver to the trustee a notice of rescission that rescinds the declaration of default, and the trustee shall cause the notice of rescission to be recorded within 30 days of receipt.
This Act provides that a trustee is not required to record the notice of rescission if the mortgage or deed of trust is paid in full and a full reconveyance or certificate of discharge is properly recorded.
D. Existing law imposes various requirements on trustee’s sales, including the time and location of the sale, postponement of the sale, and how a postponement of the sale must be announced.
This Act amends Civil Code Section 2924g by requiring that a sale be postponed 7 calendar days at the same time and location if an act of force majeure, as defined, prevents access to the sale location at the time of the sale. Also amended is the requirement for the announcement of the postponement; because the sale location is inaccessible, announcement of the postponement is not required.
E. Existing law provides the trustee with specified rights at a trustee’s sale, including the right, under Civil Code Section 2924h, to require every bidder to show evidence of the bidder’s ability to deposit with the trustee the full amount of their final bid, as specified. Existing law authorizes the trustee, in the event the trustee accepts a check or a cash equivalent, to withhold the issuance of the trustee’s deed to the successful bidder until funds become available to the payee or endorsee as a matter of right, as specified.
This Act provides the trustee the right to require any bid that is not cash to be made directly payable to the trustee, if that requirement is set forth by the trustee in the notice of sale. This Act also authorizes the trustee to require the successful bidder to replace the check or cash equivalent with a check or cash equivalent made directly payable to the trustee if necessary for the funds to be made available to the trustee.
F. Under Civil Code Section 2924m, existing law provides a prospective owner-occupant and eligible tenant buyer various rights in connection with a trustee’s sale. Existing law also provides that certain types of trustee’s sales are not deemed final until the earliest of various time periods, including 45 days after the trustee’s sale, except that during that 45-day period, an eligible bidder may submit a specified bid to the trustee that meets certain requirements, including that the bid be sent to the trustee by certified mail, overnight delivery, or another method that allows for confirmation of the delivery date, and that the bid be received by the trustee by a specified date on time, except that on the last day that bids are eligible to be received by the trustee, the trustee is prohibited from receiving any bid not sent by certified mail or overnight mail.
This Act recasts that provision to prohibit the trustee, on the last day that bids are eligible to be received by the trustee pursuant to the provisions described above, from receiving any bid not sent by certified mail with the United States Postal Service or by another overnight mail courier service with tracking information that confirms the recipient’s signature and the date and time of receipt and delivery.
Chapter 691 (AB 2004) - Recording
This Act was supported by CLTA.
This Act amends Section 1207 of the Civil Code, relating to a certificate of acknowledgment.
Under existing law, an instrument affecting real property, imparts constructive notice one year after the recording of the acknowledged instrument, notwithstanding defects in the acknowledgement, as specified. This Act instead provides that an instrument imparts constructive notice of its contents 90 days after it has been recorded, notwithstanding defects in the acknowledgement, as specified.
This Act also adds Section 27201.1 allowing for the “papering out” of a RON document for purposes of it being accepted by the recorder as a tangible copy of an electronic record, provided it is accompanied by a statutory certification by a disinterested custodian, as specified.
Chapter 767 (SB 440) - Regional Housing Finance Authorities
This Act adds Title 6.5 (commencing with Section 62500) to the Government Code and may be cited as the Regional Housing Finance Act.
This Act authorizes 2 or more local governments, as defined, to establish a regional housing finance authority to raise, administer, and allocate funding and provide technical assistance at a regional level for affordable housing development, including new construction and the preservation of existing housing to serve a range of incomes and housing types, as specified. The bill requires an authority to be governed by a board composed of at least 3 directors who are elected officials representing the local governments that are members of the authority.
In implementing this Title, an authority is authorized to do a number of things, including the following:
a. Allocate and deploy capital and generated fees or income in the form of grants, loans, equity, interest rate subsidies, and other financing tools to the cities, counties, other public agencies within the jurisdiction of the authority, private affordable housing developers, and nonprofit corporations organized pursuant to Section 501(c)(3) of the Internal Revenue Code to finance affordable home ownership and rental housing development, and preserve and enhance existing affordable housing pursuant to this title, in accordance with applicable constitutional requirements.
b. Acquire, hold, and manage or cause to be managed existing buildings of five units or more that are not currently subject to a recorded deed restriction for the purpose of attaching long-term affordability restrictions on the housing units to protect against displacement.
c. Land bank, assemble parcels, and lease, purchase, or otherwise acquire land for purpose of housing development or redevelopment and associated infrastructure. For any property acquired, the authority shall have the power to set the land use and development parameters for such property, including setting the request for proposal criteria and selection process for a development partner.
d. Accept excess or surplus property from the state, for which the state shall convey its land use authority over such property.
e. Accept public land and buildings from any governmental entity within its jurisdiction and accept responsibility for the land use authority and development of such property, including entering a joint development or participation agreement.
f. Create one or more California limited liability companies of which the authority is the sole member and exercise any of the powers granted to the authority by this title through those limited liability companies.
g. Any other implied powers necessary to carry out the intent and purposes of this title.
If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.
For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.