The Hopeful Effect of SB1511:
Notification of Trustee’s Deeds of Sale
By Jeffrey A.
Beaumont, Esq.
On September 28, 2008, Governor Arnold Schwarzenegger signed Senate Bill 1511 (“SB1511”) into law, amending California Civil Code Section 2924b as of January 1, 2009.
A copy of Section 2924b is attached to this article.
SB1511 requires banks and financial institutions to provide homeowners associations
with a copy of a trustee’s deed upon sale (“trustee’s deed”) within fifteen (15) business days of its recordation. CAI, through the California Legislative Action Committee, supported SB1511.
Homeowners associations frequently experience significant delays in receiving notification of a foreclosure,
causing additional delays in the collection of much needed assessments and in gaining compliance by owners for violations of the governing documents (most markedly regarding maintenance violations). In recent times, associations have been hard hit by the housing and financial market crisis with an increased number of owners becoming delinquent in the payment
of assessments. Knowing when an owner is foreclosed upon not only changes from whom an association seeks payment of assessments but also affects the legal remedies that may be utilized by an association against the foreclosed owner.
In an effort to permit more rapid notification of foreclosures to homeowners associations, SB1511 requires banks to provide copies of trustee’s deeds upon sale to an association that has recorded a proper notice with the County Recorder’s Office. California Civil Code Section 2924b requires that the notice include the following provisions: (1) the name and address of the residence owner; (2) the name of the mortgagee; (3) the date of recordation of the mortgage; (4) the book and page where the mortgage was recorded; and (5) the person to whom the trustee’s deed should be sent, among other items. The various counties have different recordation requirements and costs for such a request.
At first glance, many industry professionals thought that SB1511 allowed the recording of a “blanket” notice, generally permitting a single request to be recorded listing all properties in the association. This is true where: (1) permitted by the County Recorder; and (2) practical. Regarding the practicality of “blanket” notices, small communities will find it much more efficient and affordable to meet the requirements of SB1511 while recording a “blanket” notice. This especially the case since
the name and mortgage information of each owner must be listed on
the notice. However, in larger communities meeting the requirements of SB1511 in a “blanket” notice will be extremely time consuming and expensive.
Therefore, in these communities I strongly recommend that separate notices be recorded against units in collections and/or believed to
be in foreclosure.
With foreclosures increasing exponentially every day, Boards should discuss recording a request for trustee’s deed for all residences in the association to ensure continuity of operation and collection of assessments. By recording the request, it may assist
the association in avoiding extreme assessment losses and in avoiding misinformation as to the owner of a given residence. However, the size of the community will dictate the method and procedure for recording notices.