Miles To Go Before He Sleeps

Michael Belote, Esq.

By Michael Belote, Esq., California Advocates

Anyone who considers running for Governor of California should keep in mind the month of September.  It is this month when the Governor must act on the mountain of legislation forwarded to him by the Legislature for signature or veto.  Under the California Constitution, the Governor has 30 days from receipt to sign or veto bills, or they become law automatically without his signature.  This year, with the Legislature adjourning on September 9, the signature deadline is October 9.

This year Governor Brown has complained about the legislative minutiae contained in the 600 bills forwarded to him at the end of session.  Like most prior governors, Mr. Brown personally reviews each bill, the pro and con arguments, and the recommendations of his staff.  This whole process could well make September the Governor’s least favorite month.  Of course, he asked for the job, but still.

Governor Brown has promised to veto a large number of bills, and thus far his short veto messages are pithy, to say the least.  In vetoing a bill which would fine parents if their minor children do not wear helmets while skiing, the Governor wrote: “While I appreciate the value of wearing a ski helmet, I am concerned about the continuing and seeming inexorable transfer of authority from parents to the state.  Not every human problem deserves a law.”

For UTA, the worst of the worst bills this year never made it to the Governor’s desk for signature.  Nevertheless, there will definitely be bills to discuss in detail at the November UTA Conference in Las Vegas.  Probably the most significant is SB 4 (Vargas and Calderon), signed by the Governor and operative on January 1, 2012.  SB 4 makes important changes to trustee practice effective on April 1, 2012, three months after the operative date of the bill.

Under the terms of the bill, for deeds of trust secured by single-family residential properties containing one to four units, notices of sale must include new notices to potential bidders and property owners.  The language is actually contained in Civil Code Section 2924f.  The idea is to inform potential bidders that the lien being foreclosed may be a junior lien, and that they are encouraged to investigate lien priority, since they will be responsible for senior liens.  For property owners, the new notice is designed to provide information on how to track postponements of sales, in order to know when sales actually occur.

Additionally, SB 4 requires trustees to make a good faith effort to provide up-to-date information about sale dates and postponements, through websites or telephone lines available without cost to those wishing the information.  The bill has been carefully crafted to clarify that the web or telephone information availability is not intended to confer new substantive rights on parties, and the failure to maintain the information will not invalidate sales.

UTA worked very hard on SB 4 to word the bill in such a way that property owners have access to information that can assist them as human beings, without subjecting trustees to unreasonable new liability.  Certain consumer groups argued that the bill should go much further, but in the end, they were neutral on SB 4, which passed without controversy.  Much more detail will be available at the Conference.

The final status of at least a dozen other items, dealing with such diverse topics as property tax deferrals, change of ownership statements, notaries, fees for homeowners association documents, and more also will be discussed in Las Vegas.  At that time, trustees will additionally hear about the prospects for further legislative action on foreclosures as we head into 2012.  If the past is any indication, as foreclosure activity begins to ramp back up, legislative responses are a near certainty.