LEGAL UPDATE - CIVIL CODE SECTION 2924 CHANGES REGARDING FORECLOSURES:

• Section 2924(a)(4) has been added, and that section allows filing of a notice of sale as early as five days before the lapse of the three month period after filing of the notice of default, as long as the sale date is not earlier than three months and 20 days after filing of the notice of default.  Per the legislative history, this was adopted so as to allow more time for recordation delays, as the notice of sale can now be recorded 5 days before the expiration of the three month period.  The Trustee still cannot publish or post until the expiration of three month period after the filing of the notice of default of sale.  What this means from a practical standpoint is that record notice of the impending foreclosure sale may be given five days before expiration of the three month period for the notice of default, but that the foreclosure sale will still occur in the same time frame (three months and 20 days, at the earliest, after the filing of the notice of default).  In counties where there are recordation delays, this will be helpful to lenders.
  
  
• Section 2924c.  The form of the notice of default has been revised slightly.  In one place it now states "No sale date may be set until approximately 90 days from the date this notice of default may be recorded..."   In another place it now states the notice of sale may not be posted "earlier than three months after this notice of default is recorded..."    This change was adopted along with the one adopted above, but the legislative history does not call out the basis for it.  Given the genesis, we think the "approximately 90 days" is designed to acknowledge that three months from the date of recordation, using the same day of the month each month after recordation (which is common practice), could be as few as 89 days, or as many as 92 days - taking into account the calendar days in various months.  Clients need to make sure the notices received from their title company include the changes.  (One major title company representative we talked to last week was not aware of this change or the change mentioned above.  If you have received or filed notices of default since January 1, 2011, you might want to check them to make sure they have been revised to include the new statutory language).
  
  
• Section 2924f(d) has been added which applies only to real property that consists of 5 or more multifamily residential units and only if the property is subject to a recorded regulatory agreement entered into by a public entity (city, county, redevelopment agency, or public subdivision thereof) in connection with government financing, or a recorded deed restriction, in each case subjecting all or part of the property to lower income housing restrictions.  (Note: there are specific requirements relating to the deed restrictions and regulatory agreements that must be satisfied in order for the statute to apply.  For example the deed restriction or regulatory agreement must call out the number of units that are restricted to lower income families, and with respect to regulatory agreements, must call out the maximum rent that can be charged.).  Under Section 2924f(d), with respect to covered properties, a public entity that is a party to the restriction may extend the sale date by up to 60 days upon written notice provided at least 72 hours prior to sale; provided, however, that the extension cannot require a sale date more than 180 days after the filing of the notice of default.  The following example is set forth in the legislative history.

"For example, if the postponement is requested on or before the 120th day, the entity would have the benefit of the full 60-day postponement period.  If a postponement were requested 150 days into the foreclosure process, the postponement would only last until the 180th day (the wall)."  The entity could not request a postponement after the 180-day mark because they would be past the "wall."

The statute also provides that a bankruptcy does not toll the 180 day period, and that if there is more than one public entity that is a party to the deed restriction or regulatory agreement, only one extension is available.

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