By Michael Belote, Esq., California Advocates, UTA California Lobbyist

The California legislature moves fast. No issue is alive in the Assembly or Senate longer than two years, and most bills are introduced and either enacted or killed within one legislative year, which lasts approximately eight months.  It is hard, therefore, to provide an accurate snapshot of the status of legislation in Sacramento in a publication such as the UTA News, which only appears every few months.

As this column is written, only a few working days remain in the 2023 legislative year.  Both houses of the legislature will recess for the fall on September 14, not returning to Sacramento until the first week of January, 2024.  And incredibly, nearly 1,000 separate bills remain alive this late in the “year”.

One of the bills remaining alive is UTA-sponsored AB 1043 (Essayli), designed to make nearly ten changes suggested by UTA-member trustees.  Assuming enactment by the legislature prior to September 14, the bill will be sent to Governor Newsom for signature.  Under the state constitution, the governor will have until October 14 to sign the bill, which will take effect on January 1, 2024.

In no particular order, AB 1043 proposes the following changes to the law:

• – Increases the postponement fee authorized by Civil Code Section 2924c from $50 to $100;
• – Prohibits “surplus chasers” from seeking to collect surplus funds on behalf of trustors until 90 days after recordation of trustee’s deeds;
• – Eliminates liability on trustees for good faith errors in payoff and reinstatement quotes when  trustees merely provides information from the beneficiary;
• – Clarifies the ability of trustees to collect recording fees for rescissions of NODs;
• – Eliminates obsolete provisions relating to forbearance denials operative during the pandemic;
• – Changes the requirement to submit to the Attorney General’s office a “recorded” copy of a trustee’s deed under the SB 1079 process to an “executed” copy;
• – Clarifies that title remains with the record owner of the property, whether borrower or otherwise, until the SB 1079 process is complete;
• – Clarifies that the prohibition on step-bids in the SB 1079 process applies to all eligible bidders, not just eligible tenant buyers;
• – Corrects an incorrect cross-reference in Civil Code Section 2924h on the relation back period to accommodate the SB 1079 process.

Of course, lobbying for passage of AB 1043 is only one element of the UTA legislative program in Sacramento.  Nearly forty other bills sponsored by others are being monitored by UTA as well.  Essentially anything which could affect foreclosures, lien priority, and the like are identified, monitored and amended where necessary.

 Again, this year, the subject of remote online notarization (RON) has been at issue in Sacramento; the relevant bill for 2023 is SB 696 (Portantino). The good news on the RON issue is that it now appears that SB 696 will make it to the governor’s desk, after literally months of negotiation with the Secretary of State’s office, Department of Justice, and others.  Unfortunately, the bad news is that even if signed by Governor Newsom, it is likely to be a number of years before the system of commissioning RON notaries is fully implemented by the Secretary of State.  Part of the reason is technology:  the SOS is beginning the process of a major upgrade to the computer systems in the Notary Division, and this upgrade must be in place before RON commissioning can begin.

Finally, in the category of “sometimes the most important bills are the ones that are NOT introduced”, we are pleased to report that 2023 did not see the reintroduction of last year’s SB 1322, which proposed a parallel foreclosure track wherein trustees would have been required to select brokers, list properties in default on multiple listing services, evaluate and select bids on properties and ultimately sell them, all without the involvement of the owners.  This well-intentioned but seriously flawed idea was seriously considered in the legislature last year, but was held in the Assembly without a vote.