Bill Text


PDF |Add To My Favorites |Track Bill | print page

AB-828 Temporary moratorium on foreclosures and unlawful detainer actions: coronavirus (COVID-19).(2019-2020)

SHARE THIS:share this bill in Facebookshare this bill in Twitter
Date Published: 05/18/2020 02:00 PM
AB828:v96#DOCUMENT

Amended  IN  Senate  May 18, 2020
Amended  IN  Senate  April 08, 2020
Amended  IN  Assembly  March 27, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 828


Introduced by Assembly Members Ting, Gipson, and Kalra
(Principal coauthor: Senator Wiener)
(Coauthors: Assembly Members Bonta, Burke, Gonzalez, Kamlager, and Mullin)
(Coauthor: Senator Skinner)

February 20, 2019


An act to add and repeal Section 2944.11 of the Civil Code, to add and repeal Sections 730.7, 1161.05, and 1174.10 of the Code of Civil Procedure, to add and repeal Section 27212 of the Government Code, and to add and repeal Section 3732 of the Revenue and Taxation Code, relating to property rights, and declaring the urgency thereof, to take effect immediately.


LEGISLATIVE COUNSEL'S DIGEST


AB 828, as amended, Ting. Temporary moratorium on foreclosures and unlawful detainer actions: coronavirus (COVID-19).
Existing law confers a power of sale upon a mortgagee, trustee, or any other person to be exercised after a breach of the obligation for which the mortgage or transfer is a security. Existing law requires a trustee, mortgagee, or beneficiary to first file a record in the office of the recorder a notice of default, and establishes other requirements and procedures for completion of a foreclosure sale.
This bill would prohibit a person from taking any action to foreclose on a residential real property while a state or locally declared state of emergency related to the COVID-19 virus is in effect and until 15 days after the state of emergency has ended, including, but not limited to, causing or conducting the sale of the real property or causing recordation of a notice of default.
Existing property tax law attaches taxes that are owed on that property as a lien against that property. Existing law generally requires the tax collector to attempt to sell residential property that has become tax defaulted 5 years or more after that property has become tax defaulted.
This bill would require a tax collector to suspend the sale, and not attempt to sell, tax-defaulted properties while a state or locally declared state of emergency related to the COVID-19 virus is in effect and until 15 days after the state of emergency has ended.
Existing law requires a county recorder to record any instrument, paper, or notice that is authorized or required to be recorded upon payment of proper fees and taxes.
This bill would prohibit a county recorder from recording any instrument, paper, or notice that constitutes a notice of default, a notice of sale, or a trustee’s deed upon sale during the above-specified declared state of emergency relating to the COVID-19 virus. The bill would also prohibit a court from accepting a complaint in an action to foreclose.
Existing law establishes a procedure, known as an unlawful detainer action, that a landlord must follow in order to evict a tenant. Existing law provides that a tenant is subject to such an action if the tenant continues to possess the property without permission of the landlord in specified circumstances, including when the tenant has violated the lease by defaulting on rent or failing to perform a duty under the lease.
This bill would prohibit a state court, county sheriff, or party to a residential unlawful detainer case from accepting for filing, or taking any further action including executing a writ of possession or otherwise proceeding with an unlawful detainer action during the timeframe in which a state of emergency related to the COVID-19 virus is in effect and 15 days thereafter, except as specified.
The bill would also authorize a defendant, for any residential unlawful detainer action that includes a cause of action for a person continuing in possession without permission of their landlord, to notify the court of the defendant’s desire to stipulate to the entry of an order. The bill would require the court, upon receiving that notice from a defendant, to notify the plaintiff and convene a hearing to determine whether to issue an order, as specified. The bill would require the court, if it determines that the tenant’s inability to stay current on the rent is the result of increased costs in household necessities or decreased household earnings attributable to the COVID-19 virus, to make an order for the tenant to remain in possession, to reduce the rent for the property by 25% for the next year, possession and to require the tenant to make monthly payments to the landlord beginning in the next calendar month in accordance with certain terms. The bill would require declarations under these procedures to be filed under penalty of perjury.
The bill would make these provisions effective in a jurisdiction in which a state or locally declared state of emergency is in effect until 15 days after the state of emergency ends and would repeal these provisions on January 1, 2022.
By imposing new duties on county officials and also expanding the crime of perjury, the bill would impose a state-mandated local program.
The bill would contain related findings regarding the economic hardships imposed by the COVID-19 virus.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that with regard to certain mandates no reimbursement is required by this act for a specified reason.
With regard to any other mandates, this bill would provide that, if the Commission on State Mandates determines that the bill contains costs so mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
This bill would declare that it is to take effect immediately as an urgency statute.
Vote: 2/3   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 The Legislature finds and declares as follows:
(a) In late December 2019, several cases of unusual pneumonia began to emerge in the Hubel province of China. On January 7, 2020, a novel coronavirus now known as COVID-19 was identified as the likely source of the illness.
(b) Infections have rapidly spread to other countries throughout the world, including the United States.
(c) On January 30, 2020, the World Health Organization (WHO) declared COVID-19 a Public Health Emergency of International Concern, and on January 31, 2020, the United States Secretary of Health and Human Services declared a Public Health Emergency.
(d) On March 4, 2020, California Governor Gavin Newsom declared a State of Emergency to make additional resources available, formalize emergency actions already underway across multiple state agencies and departments, and help the state prepare for a broader spread of COVID-19. The proclamation comes as the number of positive COVID-19 cases and related deaths in California rises.
(e) Public health officials have indicated that people displaying symptoms that could be consistent with coronavirus as well as people in close contact with people displaying symptoms should self-quarantine by remaining in their homes.
(f) Public health officials have emphasized the critical importance of proper sanitation and good hygiene to slow and prevent the spread of the coronavirus.
(g) Most children who are unable to attend school because of closures will have to remain at home.
(h) Individuals and families who become homeless will not be able to self-quarantine at home, will not have access to proper sanitation and the facilities for maintaining good hygiene, and will not be able to care for their children at home.
(i) Both large and smaller events across California and the United States have been canceled or postponed in response to official government orders and public health recommendations at all levels of government to cancel large gatherings amid concerns over spread of the virus. These cancellations and postponements cause loss in revenue for the event, as well as surrounding local businesses that rely on such events to bring in patrons to their businesses.
(j) Due to the cancellation of local conferences and other large-attendance events, there has been a significant loss of business opportunities. Also, there is a projected loss of indirect spending – the ripple effect of incremental spending within the community that would have occurred from the direct spending in local businesses.
(k) The effects of COVID-19 on the global economy and supply chains are impacting many companies across the United States. Several large, California-based companies have indicated that quarterly earnings will be negatively impacted due to overseas factories operating at two-thirds their capacity, thus leading to missing their growth targets, potentially leading to personnel and other expense cuts. Some companies are having their employees work remotely or from home in order to prevent exposure in the workplace. With more businesses moving towards working from home, less of the workforce will be patronizing restaurants and other retail establishments that employ hourly workers, which is expected to lead to hourly cutbacks and potentially employee terminations.
(l) Many California public school districts have temporarily closed. These school closures will cause children to have to remain at home, leading to many parents adjusting their work schedules to take time off work, whether paid or unpaid. Other parents may be forced to absorb additional costs to pay for child care coverage. Hourly wage earners are unlikely to be paid for time off. The inability to work due to school closures will economically strain those families who cannot afford to take off time from work to stay at home.
(m) The economic hardships brought on by the COVID-19 pandemic mean that many California individuals and households are likely to have difficulty remaining current on their rental or mortgage housing payments through no fault of their own.
(n) Without emergency action to prevent it, this likely inability to stay current on rental and mortgage housing payments is likely to lead to a significant increase in homelessness, exacerbating what is already considered a crisis.
(o) On March 18, 2020, the Federal Housing Finance Agency directed the federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) to impose a 60-day moratorium on (1) foreclosures on single-family home mortgages that they back and (2) evictions from such home mortgages that have already been foreclosed on. This directive still leaves millions of home mortgages subject to potential foreclosure because they are not backed by Fannie Mae or Freddie Mac.
(p) The Legislature hereby finds and declares that there is a current and immediate threat to the public health, safety, and welfare and a need for immediate preservation of the public peace, health, or safety that warrants this urgency legislation, which finding is based upon the facts stated in the recitals above.

SEC. 2.

 Section 2944.11 is added to the Civil Code, to read:

2944.11.
 (a) Notwithstanding the provisions authorizing nonjudicial foreclosure in this article, the provisions authorizing judicial foreclosure in Chapter 1 (commencing with Section 725a) of Title 10 of the Code of Civil Procedure, or any other general or special law authorizing nonjudicial or judicial foreclosure, no person shall take any action to foreclose on residential real property during the period specified in subdivision (c), including, but not limited to, the following actions:
(1) Causing or conducting the sale of real property pursuant to a power of sale.
(2) Causing recordation of notice of default pursuant to Section 2924.
(3) Causing recordation, posting, or publication of a notice of sale pursuant to Section 2924f.
(4) Recording a trustee’s deed upon sale pursuant to Section 2924h.
(5) Initiating or prosecuting an action to foreclose, including, but not limited to, actions pursuant to Section 725a of the Code of Civil Procedure.
(6) Enforcing a judgment by sale of real property pursuant to Section 680.010.
(b) For purposes of this section, “person” includes, but is not limited to, the following:
(1) A beneficiary or trustee named in a deed of trust or mortgagee named in a mortgage with power of sale upon real property or any interest therein to secure a debt or other obligation.
(2) An association, as defined in Section 4080.
(3) A judgment creditor, as defined in Section 680.240 of the Code of Civil Procedure.
(4) Any successor in interest or agent of a party specified in paragraphs (1) to (3), inclusive.
(c) This section shall be operative only while there is a state or locally declared state of emergency related to the COVID-19 virus in the jurisdiction in which the residential real property is located, and shall become inoperative 15 days after the state or locally declared state of emergency ends.
(d) This section is repealed on January 1, 2022.

SEC. 3.

 Section 730.7 is added to the Code of Civil Procedure, to read:

730.7.
 (a) Notwithstanding the provisions of this chapter or any other law, no court shall accept for filing a complaint in an action to foreclose any residential real property in a jurisdiction subject to a state or locally declared state of emergency on account of the COVID-19 virus until 15 days after the state or locally declared state of emergency ends.
(b) This section shall be operative only while there is a state or locally declared state of emergency related to the COVID-19 virus in the jurisdiction in which the residential real property is located, and shall become inoperative 15 days after the state or locally declared state of emergency ends.
(c) This section is repealed on January 1, 2022.

SEC. 4.

 Section 1161.05 is added to the Code of Civil Procedure, to read:

1161.05.
 (a) Notwithstanding any other law, a state court, county sheriff, or party to an unlawful detainer case in California shall not accept for filing or take any further action, including, but not limited to, executing a writ of possession, or otherwise proceed with any unlawful detainer action except for those stating a cause of action pursuant to paragraph (3) or (4) of Section 1161 of this code or Section 798.56 of the Civil Code. If a residential unlawful detainer action is based on multiple causes of action including paragraph (3) or (4) of Section 1161 of this code or subdivisions (b) or (c) of Section 798.56 of the Civil Code, a state court in California shall not enter judgment for possession in favor of the plaintiff unless that judgment is based on either paragraph (3) or (4) of Section 1161 of this code or subdivisions (b) or (c) of Section 798.56 of the Civil Code.
(b) For any residential unlawful detainer action that is filed after March 4, 2020, that includes a cause of action under paragraph (3) or (4) of Section 1161 of this code or subdivision (b) or (c) of Section 798.56 of the Civil Code, if, by the deadline for filing an answer to the complaint, no answer has been filed with the court, the court shall proceed as though all named defendants had filed an answer denying each and every allegation in the complaint.
(c) For any residential unlawful detainer matter that does not include a cause of action under paragraph (3) or (4) of Section 1161 of this code or subdivision (b) or (c) of Section 798.56 of the Civil Code, and for which a trial, hearing, settlement conference, or other in-person appearance has been set as of the date of enactment of this section are hereby continued until further notice from the court.
(d) This section shall be operative only while there is a state or locally declared state of emergency related to the COVID-19 virus in the jurisdiction in which the property is located, and shall become inoperative 15 days after the state or locally declared state of emergency ends.
(e) This section is repealed on January 1, 2022.

SEC. 5.

 Section 1174.10 is added to the Code of Civil Procedure, to read:

1174.10.
 (a) For any residential unlawful detainer action that includes a cause of action under paragraph (2) of Section 1161, any defendant may, at any time between the filing of the complaint and entry of judgment, notify the court of that defendant’s desire to stipulate to the entry of an order pursuant to this section.
(b) Upon receiving notice from the defendant in accordance with subdivision (a), the court shall notify the plaintiff and convene a hearing to determine whether to issue an order pursuant to subdivision (c).
(1) At the hearing, the court shall first determine whether the defendant’s inability to stay current on the rent resulted from increased costs for household necessities or reduced household earnings due to the COVID-19 virus. The defendant shall bear the burden of producing evidence of increased costs for household necessities or reduced household earnings due to the COVID-19 virus. In the absence of evidence to the contrary, if the increased costs for household necessities or decreased earnings took place at any point between March 4, 2020, and March 4, 2021, then the court shall presume that the increased household costs or decreased household earnings was due to the COVID-19 virus.
(2) If the court finds that the defendant’s inability to stay current on the rent resulted from increased costs for household necessities or reduced household earnings due to the COVID-19 virus, the court shall next permit the plaintiff to show cause for why the court should not issue an order pursuant to subdivision (c) due to material economic hardship on the plaintiff. If the plaintiff has an ownership interest in just one or two rental units, then the court shall presume that issuance of an order pursuant to subdivision (c) would constitute a material economic hardship.
(3) If the plaintiff has an ownership in 10 or more rental units, the court shall presume that the issuance of an order pursuant to subdivision (c) would not constitute a material economic hardship. The formal rules of evidence shall not apply to the introduction of evidence at this hearing, but the court may look to the formal rules of evidence in determining the weight that it shall give to the documentation presented by each side.
(c) If the court determines that the tenant’s inability to stay current on the rent is the result of increased costs in household necessities or decreased household earnings due to the COVID-19 virus and the court finds that it would not be an a material economic hardship to the plaintiff and if the court determines that no cause exists after review of a timely response from the plaintiff, then the court shall make the following order:
(1) The tenant shall remain in possession.

(2)The rent for the rental property at issue shall be reduced by 25 percent for the next 12-month period.

(3)

(2) The tenant shall make monthly payments to the landlord beginning in the next calendar month, in strict compliance with all of the following terms:
(A) The payment shall be in the amount of the monthly rent as adjusted pursuant to paragraph (2), rent plus 10 percent of the unpaid rent owing at the time of the order, excluding late fees, court costs, attorneys fees, and any other charge other than rent.
(B) The payment shall be delivered by a fixed day and time to a location that is mutually acceptable to the parties or, in the absence of an agreement between the parties, by no later than 11:59 pm on the fifth day of each month.
(C) The payment shall be made in a form that is mutually acceptable to the parties or, in the absence of agreement between the parties, in the form of a cashier’s check or money order made out to the landlord.

(4)

(3) If the tenant fails to make a payment in full compliance with the terms of paragraph (2), the landlord may, after 48 hours’ notice to the tenant by telephone, text message, or electronic mail, as stipulated by the tenant, file with the court a declaration under penalty of perjury containing all of the following:
(A) A recitation of the facts constituting the failure.
(B) A recitation of the actions taken to provide the 48 hours’ notice required by this paragraph.
(C) A request for the immediate issuance of a writ of possession in favor of the landlord.
(D) A request for the issuance of a money judgment in favor of the landlord in the amount of any unpaid balance plus court costs and attorneys fees.

(5)

(4) The case is dismissed with the court retaining jurisdiction to enforce the terms of the order pursuant to Section 664.6.
(d) For purposes of this section, “material economic hardship” mean that persons enduring the economic hardship would have to limit spending on household necessities. Reduction in savings, profit margins, discretionary spending, or nonessential assets shall not constitute material economic hardship. In determining whether issuance of an order pursuant to subdivision (c) would constitute an material economic hardship for the plaintiff, the court shall bear in mind the Legislature’s intent that the common economic hardship resulting from the COVID-19 virus is not the fault of any one person or group of people and so must ordinarily be born by both landlords and tenants.
(e) This section shall be operative only while there is a state or locally declared state of emergency related to the COVID-19 virus in the jurisdiction in which the residential real property is located, and shall become inoperative 15 days after the state or locally declared state of emergency ends.
(f) This section is repealed on January 1, 2022.

SEC. 6.

 Section 27212 is added to the Government Code, to read:

27212.
 (a) Notwithstanding this chapter or any general or special law to the contrary, for the period specified in subdivision (b), a county recorder shall not accept for recordation any instrument, paper, or notice that constitutes a notice of default pursuant to Section 2924 of the Civil Code, a notice of sale pursuant to Section 2924f of the Civil Code, or a trustee’s deed upon sale pursuant to Section 2924h of the Civil Code for any residential real property located in a jurisdiction in which a state or locally declared state of emergency relating to the COVID-19 virus is in effect.
(b) This section shall be operative only while there is a state or locally declared state of emergency related to the COVID-19 virus in effect in the jurisdiction in which the residential real property is located, and shall become inoperative 15 days after the state or locally declared state of emergency ends.
(c) This section is repealed on January 1, 2022.

SEC. 7.

 Section 3732 is added to the Revenue and Taxation Code, to read:

3732.
 (a) Notwithstanding the provisions of this chapter or any general or special law to the contrary, a tax collector shall suspend the sale of tax-defaulted residential real property for the period specified in subdivision (b).
(b) This section shall be operative only while there is a state or locally declared state of emergency related to the COVID-19 virus in the jurisdiction in which the residential real property is located, and shall become inoperative 15 days after the state or locally declared state of emergency ends.
(c) This section is repealed on January 1, 2022.

SEC. 8.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution for certain costs that may be incurred by a local agency or school district because, in that regard, this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.
However, if the Commission on State Mandates determines that this act contains other costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.

SEC. 9.

 This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:
The COVID-19 virus presents severe economic hardships for the people of California, and in order to preserve the public peace, health, and safety, it is necessary for this act to take effect immediately.