At the end of 2020, 35% of Americans were projected  to lose their homes, if the government failed to intervene. Meanwhile, history has taught us that Wall Street thrives in times like these and is ready to grab up our land and homes when the foreclosure moratorium is lifted. Our collective loss, pain and grief is their windfall. To prevent Wall Street firms from creating artificial scarcities like they did in 2008 by buying thousands of homes and keeping them vacant, Sen. Nancy Skinner introduced SB 1079 last year to reduce land grabs resulting from foreclosure auctions.

Now SB 1079 is law!

We helped add a significant new section to the bill that gives it some actual teeth, and it could be a huge win for tenants, land trusts, local governments, and real estate cooperatives. In brief, if a home is not purchased at auction by someone who will be living in the home (i.e., it’s purchased by profiteers who plan to flip it or manage it as a rental), then there will now be a 45-day hold period in which tenants, potential owner-occupants, nonprofits, cooperatives, and others can purchase the property by either matching or exceeding the auction’s winning bid! 

So to make sure this law helps our community as much as possible, we've created this legal toolkit!

Homes for Communities Not Corporations
We did it! Thanks in part to the success story of our client Jocelyn Foreman, which highlighted the need for acquisition funding, Governor Gavin Newsom signed a law in July 2021 providing an additional $500 million for SB 1079 foreclosure acquisition funding. That's half a billion dollars! Sign up for more new about SB 1079 here. 

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Here's the recording of our Know Your SB 1079 Rights workshop, co-hosted by the Sustainable Economies Law Center, California Community Land Trust Network, California Reinvestment Coalition, and Urban Habitat.

This Know Your Rights Workshop covered the following issues:

❖ History of foreclosures in California;
❖ History of SB 1079;
❖ Case Studies and Strategies;
❖ Next Steps to Fighting Corporate Land Grabs; and
❖ How to buy foreclosed homes.

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Success! The first SB 1079 house purchase! One of our clients, Jocelyn Foreman is now the first renter in CA to purchase her home through the new state law SB 1079! When her home went up for auction last March, Wedgewood Inc made the $600,000 winning bid to purchase. Wedgewood is the company synonymous with artificial housing scarcity thanks to the organizing efforts of Moms4Housing. Luckily, Jocelyn raised the funds to match Wedgewood’s bid, which ultimately allowed her to own her home because of SB 1079.

But how does a tenant find $600,000 in 45 days? In Jocelyn’s case, it was through fearless leadership, her team Jocelyn’s Corner,  and assistance from an incredible team of allies and partners working with her to find the money. Her community fundraising campaign, grants from Fund for an Inclusive California and Kataly Foundation, with  the assistance of Northern California Land Trust and our volunteer attorney Daniel Rollingher helped her close the gap in time. The grant partners support land and housing stabilization initiatives that help to take housing out of the speculative market and back into community hands. Our Radical Real Estate Law School apprentices and staff attorneys have also been working non-stop these past few weeks to spread the word, recruit funders, and provide legal advice and information to ensure that Jocelyn Foreman’s SB 1079 rights are protected. Jocelyn’s home is now a community owned property!

But most tenants do not have this kind of support. That is why we needed to fund SB 1079. California Community Land Trust Network is a coalition of more than 30 community land trusts throughout California, and they fought to fund the Home for Homeowners, Not Corporation Act. We signed on to their demand because we believe that homes are for communities, not corporations. And we did it! Thanks in part to the success story of our client Jocelyn Foreman, which highlighted the need for acquisition funding, Governor Gavin Newsom signed a law in July 2021 providing an additional $500 million for SB 1079 foreclosure acquisition funding. That's half a billion dollars! 

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When a property goes into foreclosure, it is entrusted to a “trustee” to try and resell the property in an attempt to recoup any losses. The trustee can sell the foreclosed property at a public auction. When a trustee sells a foreclosed property at auction, it is known as a trustee's sale. Trustees contract third party companies, like auction.com, to conduct the sale.

SB 1079 puts people over corporations. The policy can slow down land grabs by making outside investors wait for an eligible bidder to decide whether they want to place a bid after the foreclosure auction also known as a trustee's sale. So instead of automatically going to the highest bidder, a foreclosed home could go to an eligible bidder instead.

Who can make an SB 1079 Purchase?

To make an SB 1079 purchase, you must be an eligible bidder. Eligible bidders include tenants of the foreclosed property [1], prospective owner-occupants [2], community land trusts (CLT), limited-equity housing cooperatives (LEHC), and others [3].

If you are an "eligible tenant buyer," you can purchase the property if you match the last and highest bid placed at the trustee auction. If you are an "eligible bidder," you may be able to purchase the property if you exceed the last and highest bid placed at the trustee auction AND that bid is higher than that placed by any competing eligible bidders AND an eligible tenant buyer does not assert their right.

How to make an SB 1079 Purchase in Three Steps

There are three steps to exercising the SB 1079 right of purchase.

Step 1: 48 hours after the date of the trustee's sale, find the amount of the last and highest bid. You can identify this by calling the trustee company or the auction company they have hired. This information is also provided on their respective websites.

Step 2: Send a written notice of intent to place bid so that the trustee receives it no more than 15 days after the trustee’s sale. (See our templates below for example notices of intent and check the trustee company’s website, they may have a document they prefer you to use. Here's an example.)

Step 3: Submit a bid (the funds) and affidavit no more than 45 days after the trustee’s sale. Foreclosure auctions require all payments to be issued in full and in cash (cashier’s check). The same is true for bids placed under SB 1079. 

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FAQ's: What are your SB 1079 rights? | How do you find out if the home you rent is in foreclosure? | How much time do you have to exercise your SB 1079 rights? | What happens after you place a bid? | Where can you get help? | Pro-Tips

Q: What are your SB 1079 rights?

A: As an eligible tenant buyer, you can purchase the property that you live in by matching the last and highest bid placed at the trustee auction. 

Q: How do you find out if the home you rent is in foreclosure?

A: If you’re living in a home that is in foreclosure you’ll find a foreclosure notice, also known as a “Notice of Trustee's Sale”, posted on the property. The notice should also inform you of your right to purchase the property under SB 1079.  

The Notice of Trustee's Sale will include the date, time, and location of the foreclosure sale; the property address; the trustee’s name, address, website, and phone number; the company contracted to perform the sale; and a statement that the property will be sold at a public auction.

Q: How much time do you have to exercise your SB 1079 rights?

A: You have no more than 15 days after the trustee's sale to send a written notice of intent to place bid. You have no more than 45 days after the trustee's sale to send the cashier's check and affidavit. Note the location of the trustee company and their business hours. BE SURE to count out the days. BE SURE to allow enough time for the document to arrive and BE SURE to send it early if the deadline falls on a weekend, to ensure it arrives by close of business on the preceding Friday. Also, BE SURE to send the documents with confirmed receipt by a carrier who can guarantee and track delivery. DON’T DELAY! SEND IT RIGHT AWAY! 

Q: What happens after you place a bid? 

A: If you are an eligible tenant buyer and you have submitted a bid in an amount equal to the full amount of the last and highest bid at the trustee’s sale you will be deemed the last and highest bidder and a Trustee’s Deed Upon Sale will be issued to you by the trustee!

Q: Where can you get help? 

A: If you think you may qualify as an “eligible tenant buyer,” you should consider contacting an attorney or appropriate real estate professional immediately for advice regarding this potential right to purchase. We encourage you to bring your questions to a Sustainable Economies Law Center Legal Cafe. When completing the intake form be sure to let us know that you are reaching out about SB 1079. If there are no available cafe dates prior to the scheduled auction, please email us. We will do our best to connect with you. We recognize the time sensitive nature of your legal issue. Also consider reaching out to a land trust or permanent real estate cooperative to help you get funding for your SB 1079 purchase. 

Pro-Tip #1: As the current tenant, you have leverage and rights:

Because a property sells for considerably more when vacant and because the owner is entitled to all funds from the sale after outstanding debts are paid, be aware  that the landlord may try to get you out of the house using a variety of tactics.  It’s often in your best interest to hold firm.  You can use the time to save money, weigh your options, and negotiate a possible “cash for keys” payment to leave. You must maintain possession of the property in order to be eligible for relocation money or to exercise your rights under SB 1079!

Also, parties interested in purchasing the property may come by to assess the home's condition.  You may notice them driving by slowly or stopping to take pictures. You are not required to answer any questions,  grant access to your home or any portion of the property.  You should also be aware that any information you provide to unknown parties could be used for "foreclosure rescue scams" against the homeowner. It is typically not in your interest to engage these parties and if they persist you can call the trustee company to ensure that they have the property listed as tenant occupied. 

Interested buyers may even offer to help you, but you should be aware that this is an established tactic in the industry.

Pro-Tip #2: Track the status of the property:

Don’t wait until the auction to start tracking the status of the property. You can do a simple google search of the address. If it is scheduled for auction you will be able to find it and track the status on the auction company website. Here is an example. The name of the auction company should also be provided on the “Notice of Trustee's Sale.” Sign up for notifications so you get alerts when there are changes or updates. Sometimes, properties will be listed as not cleared for sale even though they have an auction date listed. Some properties are not cleared for sale and the auction date is postponed, rescheduled or even cancelled. This can happen several times. Other properties may not be cleared for sale at the start of the auction but may be cleared before all sales for the day have concluded. DO NOT rely on the information provided online. Until you know for certain otherwise, assume it will be auctioned that day - whether it has been cleared for sale on the website or not.

Pro-Tip #3: Make sure everyone knows that a tenant lives at the property: 

As a general rule, a property that is vacant fetches a higher price than the same property when occupied. Take a close look at the information provided on the auction company website. Note what is listed under occupancy. If the information reads owner-occupied or vacant, contact the company and ask that they update it to accurately reflect that the property is tenant-occupied. This status communicates to any potential bidder that there are tenants and that they should not be disturbed. It also potentially reduces the number of bidders because a profit margin can be impacted, in a somewhat unpredictable way, by the expense of paying out or evicting tenants. This can also result in a lower sale price because those fewer bidders may be inclined to pay less because they anticipate  expenses related to removing the existing tenants. 

Pro-Tip #4: Attend the auction to gather information and to let others know that you're a tenant of the property!

You don't have to attend the auction to exercise your SB 1079 rights, but it could be helpful if you do! Don’t wait for the information, get it first hand. When attending the auction, bring someone from your community. Record it if possible and be sure to announce yourself so potential bidders are aware of your presence and intention to exercise your purchase rights under SB 1079. (You can do this by loudly introducing yourself to the auctioneer and asking questions about the property and process or discussing it with the friend attending with you.) If you are feeling really feisty and want to put some of that nervous energy to good use print up a flyer and hand it out stating something like this: 

ATTENTION POTENTIAL BIDDERS:
I am a tenant at __________;
I know my housing rights and intend to assert them; and
I am an eligible tenant buyer intending to exercise my purchase rights under SB 1079!                

HOUSING IS A HUMAN RIGHT!!!
COMMUNITIES OVER CORPORATIONS!!!

Be sure not to take any action that can be characterized as interference with the sale! This is illegal and can result in undesired consequences.

Pro-Tip #5: The notice of intent to place a bid is non-binding; just send it!

Consider sending a written notice of intent to place bid even if you are unsure how you might come up with the funds. The notice is non-binding, meaning there is no harm or penalty for not following through with a bid. This measure keeps your option open and affords you additional time to consider your next steps.

Pro-Tip #6: If you have the funds ready, you can go straight to placing a bid:

If you have the funds, you can skip sending a notice and go straight to placing a bid (sending funds) and submitting the affidavit. If you exercise this option be sure the funds arrive NO LATER THAN the 15th day after auction.

Pro-Tip #7: Keep these things in mind:

Keep in mind that the foreclosure process can be very unpredictable. Auction dates can be postponed several times, sometimes even on the day-of. Other times, the process can be so fast that landlords often don’t have the time to follow through with threats of legal action. 

Other issues to look out for and research include title and lien issues, and it’s always good to make sure you’re aware of the overall condition of the house.

Pro-Tip #8: How to deal with the police and landlord harassment:

Unfortunately, many in our community have trauma related to the police. If your landlord has threatened to or has previously used the police as tools for harassment or intimidation, seek out and create a list of friends or allies who can show up for you during an active threat. Try to identify people who live and/or work close by so they can respond quickly. Put together a phone tree or group text. Be strategic and avoid asking this of anyone for whom it might be dangerous or who may, for any reason, find it difficult to engage, document, and de-escalate. Having this list can ease your emotional burden a bit even if you find you do not need it. Just knowing you have a network of support at your back can make a world of difference. You may find this useful, no matter your circumstances. Active threats to your housing can be very stressful. 

You may want to consider installing a cheap security camera to protect you against any false claims and to document any interactions you may have with the landlord or their representatives. In the absence of that, try to keep a charged phone or camera close to the door so you can record all interactions.

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FAQ's: What are your SB 1079 rights? | How much time do you have to exercise your SB 1079 rights? | How are your SB 1079 rights different from the rights of an eligible tenant buyer? | What happens after you place a bid? | Where can you get help? 

Q: What are your SB 1079 rights?

A: If you are a future owner occupant or other eligible bidder, you may be able to purchase the property if you exceed the last and highest bid placed at the trustee auction. Your bid must be higher than that placed by any competing eligible bidders. If your bid is the highest bid, then the home is yours unless an eligible tenant buyer also asserted their right.

Q: How much time do you have to exercise your SB 1079 rights?

A: You have no more than 15 days after the trustee's sale to send a written notice of intent to place bid. You have no more than 45 days after the trustee's sale to send the cashier's check and affidavit. Note the location of the trustee company and their business hours. BE SURE to count out the days. BE SURE to allow enough time for the document to arrive and BE SURE to send it early if the deadline falls on a weekend, to ensure it arrives by close of business on the preceding Friday. Also, BE SURE to send the documents with confirmed receipt by a carrier who can guarantee and track delivery. DON’T DELAY! SEND IT RIGHT AWAY! 

Q: How are your SB 1079 rights different from the rights of an eligible tenant buyer?

A: Under SB 1079, eligible tenant buyers are given right of first refusal, while only being required to match the highest bid at auction. If you are a future owner occupant or other eligible bidder, it is not adequate to match the prevailing bid from the trustee’s sale. Instead, you must over-bid in an amount that exceeds the full amount of the last and highest bid at the trustee sale.

Q: What happens after you place a bid? 

A: As of 5 p.m. on the 45th day after the trustee’s sale, if one or more eligible bidders have submitted a bid, the eligible bidder that submitted the highest bid shall be deemed the last and highest bidder and a Trustee’s Deed upon Sale will be issued in the highest bidder's name. UNLESS, an eligible tenant buyer has asserted their right. The Trustee will return any losing bid(s) to the eligible bidder(s). 

Q: Where can you get help? 

A: If you think you may qualify as an “eligible tenant buyer,” you should consider contacting an attorney or appropriate real estate professional immediately for advice regarding this potential right to purchase. We encourage you to bring your questions to a Sustainable Economies Law Center Legal Cafe. When completing the intake form be sure to let us know that you are reaching out about SB 1079. If there are no available cafe dates prior to the scheduled auction, please email us. We will do our best to connect with you. We recognize the time sensitive nature of your legal issue. Also consider reaching out to a land trust or permanent real estate cooperative to help you get funding for your SB 1079 purchase. 

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Notice of Intent Templates

For eligible tenant buyers | Our client, Jocelyn Foreman, was an eligible tenant buyer and she used a notice of intent to place bid similar to this one. Jocelyn was an eligible tenant buyer so if your landlord has defaulted on their mortgage payments, then this template would be the most relevant one for you. Some trustee companies prefer you use a template they make available on their website. Here is an example from Quality Loan Corporation, it is found under resources on their website. You may need to do some digging to find it on the website of the trustee company you will be engaging with.

For prospective owner occupants |Use this template for prospective owner occupants if you want to purchase a home where the prevailing bid at auction was placed by a speculating individual or corporation.Note: you must send this written notice of intent to place bid such that the trustee receives it no more than 15 days after the trustee's sale.

For other eligible bidders | Use this template for other eligible bidders if you're a nonprofit organization, cooperative, etc. 

Affidavit Templates

If you're submitting your bid, you must send your funds along with an affidavit. Here is a template for eligible tenant buyers and here is a template for prospective owner occupants. 

Other Resources

We compiled a list of community land trusts, permanent real estate cooperatives, tenants' rights lawyers, transactional lawyers, and legal clinics here.

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Eligible Bidder: 

Under SB 1079, eligible tenant buyers, prospective owner-occupants, and others are eligible bidders:

⃞ An "Eligible Tenant Buyer," is a natural person who: At the time of the trustee’s sale occupies the property as the person’s primary residence; At the time of the trustee’s sale has an arm’s length lease agreement with the Borrower that is dated before the Notice of Default was recorded, and; Is not the Borrower or the Borrower’s family member.

⃞ A "Prospective Owner-Occupant," is a natural person who gives an affidavit to the trustee stating that the person: Will occupy the Property as the person’s primary residence within 60 days after the trustee’s deed is recorded; Will live in the Property for at least one year; Is not the Borrower or the Borrower’s family member, and; Is not acting as the agent of any other person or entity in buying the property.

⃞ "Other Eligible Bidders" include:

⃞ A nonprofit association, nonprofit corporation, or cooperative corporation in which an eligible tenant buyer or a prospective owner-occupant is a voting member or director (CCC §2924m(a)(3)(C))
⃞ An eligible nonprofit corporation based in California whose primary activity is the development and preservation of affordable rental housing (CCC §2924m(a)(3)(D))
⃞ A limited partnership in which the managing general partner is an eligible nonprofit corporation based in California whose primary activity is the development and preservation of affordable housing. (CCC §2924m(a)(3)(E))
⃞ A limited liability company in which the managing member is an eligible nonprofit corporation based in California whose primary activity is the development and preservation of affordable rental housing. (CCC §2924m(a)(3)(F))
⃞ A community land trust, as defined in clause (ii) of subparagraph (C) of paragraph (11) of subdivision (a) of Section 402.1 of the Revenue and Taxation Code. (CCC §2924m(a)(3)(G))
⃞ A limited-equity housing cooperative as defined in Section 817. (CCC §2924m(a)(3)(H))
⃞ The state, the Regents of the University of California, a county, city, district, public authority, or public agency, and any other political subdivision or public corporation in the state. (CCC §2924m(a)(3)(I))

SB 1079:

SB 1079 is a California law that passed in 2020. You can find the entire bill here.

Trustee:

A foreclosure trustee is a third party hired by a lender to handle the foreclosure process.  

Trustee Sale: 

The trustee sale is the sale of real property through public auction. Typically, when the auction is over, ownership of the property is transferred to the highest bidder. SB 1079 slows down this process to protect tenants, prospective owner-occupants, and other eligible bidders. A trustee sale is commonly referred to as a "foreclosure auction." 

Released May 2021

Written by the Sustainable Economies Law Center, with contributions from the following authors: Tia Katrina Taruc-Myers, Christine Hernandez, Hope Williams,  Alejandra Cruz, and Mwende Hinojosa. 

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