Riverside County, California Ordinance Prohibits
Trustee Sales on County Property Passes But With Caveats

The current scenario in front of
the Riverside Courthouse

On June 7th, the Riverside County Board of Supervisors passed Ordinance No. 906 by a vote of 4-0 (with one Supervisor absent) that will prohibit solicitation on County Property. While Supervisors at prior meetings focused primarily on trustee sales in front of the historical Riverside Courthouse, the ordinance as passed, covers commercial solicitation on all county property.  “County property” is very broadly defined an may include leased property and property leased by the county to others.  The ordinance will become effective 30-days after the adoption of the ordinance by the Supervisors on June 7, 2011 and it has a 90-day phase-in period before it will be enforced (i.e. it becomes fully effective after October 5, 2011, unless extended.) 

The Supervisors appeared to recognize the importance of conducting trustee’s sales in the public square and the substantial economic cost if the trustee’s had to reprocess notices of sale due to location changes. While no express exemption was made for trustee sales, the ordinance was amended to delegate authority to the County’s Economic Development Department (“EDA”) consulting with the Presiding judge. The Supervisors asked the EDA and Presiding Judge to work with the industry to find a temporary solution to the concerns about sales at the Old Courthouse which would avoid the costly renoticing of trustee’s sales and to work on a permanent solution by finding a public location where future trustee’s sales could be noticed and conducted.

While the head of the EDA and Presiding Judge were among the proponents of the ordinance, UTA intends to negotiate with them in good faith to reach a temporary or permanent solution to the issues raised by the passage of this ordinance. The Supervisors suggested that if good faith efforts do not result in a solution, the Board would consider a further extension to the phase-in period. All impacted trustee’s and posting and publishing companies using any Riverside County owned or leased property should also participate in the negotiations.
 
Supervisors were persuaded of the need to require a lead time of 365 days to change the address of the bidding site, after testimony from Phil Adleson, Esq., Adleson, Hess & Kelly, Counsel to the United Trustees Association and testimony from Julie Randall, Vice President, Union Bank, and UTA Director; Sherry Betterly of FEI; Renee Patrick-Nord of Trustees Assistance Corporation (TAC); Wendy Curl and Felita Kealing of LPS Agency Sales & Posting and UTA Director, and Pam Sosa, President of the California Mortgage Association.

Supervisors initially heard testimony from the Presiding Judge of the Riverside County Superior Court, Judge Sherill Ellsworth, who stated that the bidders in front of the courthouse represented a “carnival” that “degrades the courthouse.”  Judge Ellsworth claimed the issue was a “safety and access” issue.  Also advocating in favor of the ordinance was John Brown, a local attorney and Rob Field, Riverside County Assistant County Executive Officer/Economic Development Agency (EDA) Executive Director.

Adleson pointed out that the ordinance went too far by prohibiting trustee sales on any county property – not just in front of the courthouse.  He outlined the need for sales to be conducted in the public square, openly and with transparency as well as the need for a phase-in period of 365 days to avoid costly reprocessing of numerous notices of sale due to location changes.  Patrick-Nord pointed to the financial burden that would be placed on TAC should the ordinance pass as written while Betterly noted that trustee sales were a remedy, playing an important role in maintaining Riverside County property values.  She also noted that the Courthouse location had been used for over thirty years to conduct sales.   Wendy Curl of LPS noted the tremendous financial costs incurred without appropriate lead time.

Supervisors were sympathetic to additional costs incurred through reposting and republishing. That argument was also relayed to the Supervisors in a letter from UTA President Robert Finlay, Esq., of Wright, Finlay & Zak: 

“… should notices have to be re-published to a new sales location, surplus funds due to Riverside homeowners from a third-party sale will be reduced. … We respectfully request that the County repeal the ordinance’s effect date until at least we can meet with representatives of the County along with other interested parties and resolve this issue.”

Rob Field, Riverside County Assistant County Executive Officer/Economic Development Agency (EDA) was charged with implementing the ordinance and directed to consult with trustees. UTA will keep members apprised as the Association discusses the matter with County representatives.

Read Riverside County Ordinance 906

Read UTA’s Letter to the Riverside Board of Supervisors