SB 1511 – Amends Foreclosure Statute in the Civil Code

Feldsott & Lee
A Law Corporation

As of January 1, 2009, Senate Bill 1511 (hereinafter “SB 1511”) will become operative. SB 1511 amends Civil Code §2924(b) to allow any party to record a request for notification of any Notice of Default or Notice of Sale on a specific property. The request must be recorded after recordation of the Deed of Trust or Mortgage and prior to recordation of a Notice of Default. A party that records such a request would be entitled to a copy of a Notice of Default within 10 days of its recordation and a Notice of Sale at least 20 days before the date of sale. The mortgagee, trustee, or other person authorized to record the Notice of Default or Notice of Sale would be obligated to send the copies to each requesting party.

SB 1511 will allow associations to be timely informed of the pending foreclosure without having to constantly check with their title companies. The burden is now on the mortgagee or trustee. Timely notice will help associations to bill a new owner for assessments immediately upon foreclosure and will also help associations to track pending foreclosure sales to assess how to proceed with collection of delinquent assessments.

The form for request of notification must substantially be in the following form:

“In accordance with Section 2924b, Civil Code, request is hereby made that a copy of any notice of default and a copy of any notice of sale under the deed of trust (or mortgage) recorded ___________, _____, in Book _____ page _____ records of ___________County (or filed for record with recorder’s serial number _____________, ___________ County), California, executed by ________________________________ as trustor (or mortgagor) in which ________________________________ is named as beneficiary (or mortgagee) and _________________________ as trustee, be mailed to
              name                  at              address                   .

Recording requests for notification will be an additional cost for associations to consider. Depending on the county, the procedure for recordation may vary. For example, in Los Angeles County, it may be possible for associations to record one request listing all Assessor’s Parcel Numbers for the properties within the association, while in Orange County, associations may have to record one notice at the time of lien for each delinquent property.

Also, associations should carefully consider where the notices should be mailed since a new request must be recorded if the address for notice changes. For example, if the notices are being sent to an association’s management company and the association subsequently switches management companies, it must record a new request at additional cost.