UTA Reaches Out To The Department Of Corporations And To County Recorders Association To Resolve The Many Ambiguities In AB 1599 (New Civil Code § 2923.3)

Ambiguous changes due April 1

Last year, the California legislature passed AB 1599 which was signed by the Governor. AB 1599 added Civil Code § 2923.3. With respect to loans secured by residential property containing no more than 4 dwelling units, AB 1599 required:

• That a notice to be placed at the beginning of any notice of default and notice of sale stating: “NOTE: THERE IS A SUMMARY OF THE INFORMATION IN THIS DOCUMENT ATTACHED.”  The notice had to be in English and translated into Spanish, Chinese, Vietnamese, Tagalog, and Korean (“foreign languages”).
  
  
• “Recorded” copies of the notice of default (“NOD”) and notice of sale (“NOS”) along with summaries of key provisions of those notices in English and Spanish, Chinese, Vietnamese, Tagalog, and Korean must be mailed to the trustor.
  
  
• AB 1599 required that the California Department of Corporation (“DOC”) translate the foreign language notice and the summaries of key provisions.
  
  
• The summaries do not have to be recorded or published even though the Notice on the NOD and states that summaries are “attached.” (Cal. Civil Code § 2923.3)
  
  
• The above requirements were scheduled to take effect on April 1, 2013.

UTA received numerous calls and e-mails regarding attempted compliance with AB 1599.  As noted by UTA’s counsel, Phil Adleson, “the only thing clear about AB 1599 is that it is clearly ambiguous.”

UTA took a 3 step approach to these ambiguities. First, UTA’s Counsel worked with the DOC to resolve issues relating to the translations of notices and summaries of key provisions.  Second, UTA’s legislative advocate, California Advocates, coordinated with the County Recorder’s Association of California (“CRAC”).  Third, Richard Meyers, UTA’s Executive Director, coordinated setting up an ad hoc working group to discuss AB 1599 compliance issues and potential solutions.

To address concerns about whether County Recorders would accept the new  NOD and NOS for recording if the new summaries were not attached, the working group developed sample language. The group has produced two samples of language that trustees might add to the NOD or NOS to point out that the new summaries are only attached to the copies mailed to the trustor and not to the recorded original. The non-statutory language is bracketed to indicate it is not part of the official notice or form. The group agreed that the statement would be added into the NOD and NOS at the beginning.

Disclaimer: These forms are for discussion purposes only. Use of these forms should only be done after a trustee obtains advice of from the trustee’s independent and qualified legal counsel.

View Sample Language A
View Sample Language B

For trustees who attempt to record an NOD or NOS without attaching the AB 1599 summaries,  our understanding from the County Recorder’s Association of California (“CRAC”) is that most county recorders have indicated that, starting on April 1, 2013, they will accept for recording an NOD or an NOS without the AB 1599 summaries being attached.  Sacramento County is one such County (i.e., provided they meet regular recording requirements). The recorders in a few counties (we don’t have the names of all counties yet), including Napa County, have indicated they would be rejecting NODs or NOSs presented for recording without the AB 1599 summaries. The CRAC Legislative and Recording Committees, (and the CRAC President) have reaffirmed the CRAC’s recommendation that county recorders accept an NOD or NOS documents without the AB 1599 summaries being attached. 

For specific legal advice on how to respond to problems with county recorders rejecting your filings, you should obtain advice from your own counsel. 

DOC Website revisions: On Saturday, March 30, 2013, the DOC revised its webpage to note a number of revised forms including the English version of the NOS summary. 

Read the DOC webpage

It appears the changes in the English version of the NOS summary merely changes formatting. The actual language required is provided in Civil Code section 2923.3 and we assume trustees used that language for their compliance and we doubt formatting will be a legal issue as the statute is silent on formatting.

Regarding the foreign language translations, DOC has made some modification on March 28th. UTA Counsel, Phil Adleson, Esq., Adleson, Hess & Kelly, has made several specific inquiries to DOC. It appears that the DOC has responded to the request in our letter by providing English instructions for the blanks.

See Spanish translation revised March 28, 2013

Members should only rely on the advice of your professional translators.

When more information is made available from the DOC, we will pass that on to members.