Legislative Gossip Years: 2009 / 2010 / 2011 / 2012 / 2013Last Updated: October 25, 2012

Here’s a list of the 2012 Legislative Session’s bills and Department of Real Estate Regulations which may substantially affect how you do business as a real estate licensee. Bills are sorted by topic, and we provide you with the bill number, the status, and a brief description of the bill. Reports on passed bills can be found on our Legislative Watch page. This list is updated every month, most recent updates are in red.

Status Legend:

INTRO = Date the bill was originally introduced for consideration. Bill is still being considered, but not yet law.
AMENDED = Date the bill was last amended. Bill is still being considered, but not yet law.
ENROLLED = Bill approved by both houses and pending the governor’s signature.
PASSED = Bill signed by the governor and passed into law.

Energy Efficiency
This bill would require the State Energy Resources Conservation and Development commission to analyze and evaluate energy efficiency standards for nonresidential buildings.
This bill would indefinitely require a 30-day notice to be given to a borrower before a lender files a Notice of Default (NOD). This bill would also indefinitely require a tenant or subtenant of a property sold in foreclosure to be given 60 days’ written notice to quit the property before being removed.
Until January 1, 2018, this bill would require the legal owner of a vacant residential property purchased at a foreclosure to maintain the property or face penalties up to $1,000 per day of violation.
AB 1602 and         SB 1470AMENDED
This bill would:

  • require a lender to provide documentation to the borrower establishing its right to foreclose prior to recording a notice of default (NOD);
  • require a lender to provide documentary evidence of ownership, chain of title and documentation demonstrating the right to foreclose at the time of filing an NOD; prohibit a lender from filing an NOD or a notice of trustee’s sale (NOTS) when a timely-filed application for a loan modification or other loss mitigation measure is pending;
  • prohibit a lender from recording an NOTS while a borrower is in compliance with the terms of a trial loan modification or other approved loss mitigation measure; and
  • require a lender to disclose why a loan modification or other loss mitigation measure has been denied; and require a lender to personally serve a notice of foreclosure sale or postponement. (Part of the California Homeowner’s Bill of Rights)
AB 2425 and         SB 1471AMENDED
This bill would require lenders to provide a single point of contact and dedicated contact information to borrowers in the foreclosure, loan modification, shortsale or other loss mitigation processes. This bill would also authorize a borrower to challenge an unlawful foreclosure commencement in court and impose a $10,000 penalty for “robosigned” documents. (Part of the California Homeowner’s Bill of Rights)
AB 2314 and         SB 1472PASSED
This bill would prohibit action, including fines and penalties, against purchasers of blighted property within 60 days of purchase if repairs are diligently being made to the property. (Part of the California Homeowner’s Bill of Rights)
AB 2610 and         SB 1473PASSED
This bill would extend until December 31, 2019 the rules requiring purchasers of foreclosed homes to honor terms of existing fixed-term leases, and give tenants of month-to-month rentals at least 90 days notice before beginning the eviction process, unless the new owner will occupy the home as a principal residence (Part of the California Homeowner’s Bill of Rights)
This bill would prohibit a deficiency judgment on any refinance of a purchase money loan, except on new principal not applied to the purchase money loan, or to fees, costs or expenses of the refinance. This would become effective for purchase-money refinances executed on or after January 1, 2013.
This bill would require, until December 31, 2019, an owner-by-foreclosure who serves a notice to quit within one year after a foreclosure sale to notify the tenant receiving the notice of their potential right to remain on the property for 90 days or more on a separate cover sheet.
This bill would require a mortgagee, trustee beneficiary or authorized agent to attach a translated summary of mortgage terms in Spanish, Chinese, Tagalog, Vietnamese and Korean to each notice of default and notice of sale of one-to-four unit residences, beginning April 1, 2013.
This bill would require until January 1, 2018 a mortgage servicer, mortgagee, trustee, beneficiary or authorized agent to contact a borrower before filing a notice of default to explore options to avoid foreclosure.
This bill would require a landlord accept rent payment or security deposit by at least one form of payment other than cash or electronic funds transfer.
This bill would allow a landlord to retain, sell or destroy personal property left behind and unclaimed by a former tenant if the value of the property is less than or equal to $700. It would allow the landlord to e-mail a notice specifying how a tenant can recover personal property and the time frame for recovery.
This bill would prohibit the management of a mobilehome park from making a space rental agreement contingent on the mobilehome owner agreeing to an arbitration clause or waiving their right to a trial by jury as a result of a dispute between the owner and the management.
This bill would, until January 1, 2018, require a landlord of a one-to-four unit residence who has received an NOD to disclose the NOD in writing to any prospective tenants prior to executing a lease. If the landlord violates this provision the tenant may void the lease and recover one month’s rent or twice the amount of actual damages from the landlord, all prepaid rent and any other remedies available. If the tenant does not void the lease and the foreclosure sale has not occurred, he may deduct one months’ rent from future rent obligations to the landlord.
This bill would allow landlords to qualify for energy savings programs to repair heating or hot water systems on rental properties.
This bill would require all residential sale contracts entered into on or after July 1, 2013 to contain a notice specifying the locations of gas and hazardous liquid pipelines on the property.
This bill would require the DRE to obtain fingerprints from any licensee who files a petition for reinstatement of a suspended or revoked license. If the ensuing background check shows the licensee has committed a crime or been found guilty of fraud, the DRE may bar the licensee from participating in licensing examinations. This bill would also make cheating on a licensing examination a crime and the DRE may refuse to issue a license to the cheater for up to three years. It would require applicants for a mortgage loan originator (MLO) endorsement to wait at least six months between testing after failing the test three consecutive times. This bill would also exempt certain military licensees from renewing their MLO endorsement until one year after termination of their military service or until the licensing period commencing after they engage in business.
This bill would change the education-in-lieu-of-experience prerequisite for real estate broker licenses from having a four-year college degree with a specialization in real estate to a four-year degree with a major or minor in real estate.
This bill would require lenders to provide the following documents to a homeowner at least 14 days before recording a notice of default (NOD):

  • a deadline to file an application for loan modification;
  •  a declaration the homeowner is not entitled to benefits under the federal Servicemembers Civil Relief Act;
  • a declaration the lender, or authorized agent, has possession of the note and deed of trust;
  • copies of the note and trust deed, or a declaration stating the documents cannot be located.

This bill would prohibit lenders from collecting late fees or recording an NOTS while the homeowner is being considered for or is compliant with a foreclosure alternative.

If passed, a lender who fails to comply with these laws would be subject to cancellation of a pending trustee’s sale or providing the homeowner compensation if the sale has been completed.

This proposal would reduce the maximum allowable seller concessions to reflect industry norms. The proposal calls for a 30 day public comment period and analysis before a final rule is issued.
Until January 1, 2017, this bill would prohibit any person who negotiates, arranges or offers to perform a mortgage modification for one-to-four unit residential property from collecting any pre-performance compensation, requiring collateral to secure payment or taking a power of attorney from the borrower.
This bill would prohibit a mortgagee, beneficiary or authorized agent from recording a notice of trustee’s sale after providing written approval for a shortsale, unless the short sale approval has been revoked, in writing due to the borrower’s failure to comply with a condition of the written short sale agreement.
This bill would limit the definition of mortgage loan originator to one who takes mortgage loan applications, negotiates or offers mortgage loans for compensation six or more times a year.
Real Estate Practice
This bill would impose a $75 fee for the recording of every real estate instrument, paper or notice required or permitted by law to be recorded.
This bill would allow deductions on all portions of property tax bills, including but not limited to real property taxes, personal property taxes, special taxes, special assessments, fees and other charges. Editor’s note — Since Mello-Roos bonds are not taxes (they are loans), such amounts should not be deductible except to the extent of the interest paid by the homeowner under the bond payments.