Real Property Law Update | SB 1079 & AB 1837: Buying Properties in Foreclosure

On September 28, 2022, Assembly Bill 1837 introduced by Assemblymember Mia Bonta (D-Oakland) was signed into law by Governor Newsom. This bill serves as a reform of previously enacted Senate Bill 1079 passed into law in 2020 and authored by State Senator Nancy Skinner. SB 1079 and AB 1837 together are  a win for tenants, homeowners struggling to pay a mortgage and stay in their homes and affordable housing organizations seeking to intervene in foreclosure sales to provide affordable housing. 

SB 1079

SB 1079, signed into law two years ago in 2020, is known as the “Homes for Homeowners, Not for Corporations” bill. It changed existing law related to foreclosures of homes to prohibit bundling 1 to 4 unit residential properties during foreclosure. It also gives tenants, nonprofits, and  government entities an extra window of time to place a bid on a property in a foreclosure auction, and to only need to meet the last, highest bid in the regular foreclosure auction to prevail. The goal was to make it easier for ordinary individuals, tenants, and nonprofits to access properties in foreclosure auctions, which are generally extremely fast-paced and dominated by real estate speculator-investors.

While there have been individuals who have successfully used SB 1079 to purchase and remain in the houses they live in (check out a previous blog post on the FIHPP), others have lost their homes to profit-minded organizations utilizing SB 1079. These organizations, many under the guise of charitable causes such as developing affordable housing, have used the law to flip houses for profit, as detailed in this KQED story. 

AB 1837

In response to this loophole, AB 1837 will make the following changes to the law: 

  • Extends effect of the Homes for Homeowners, Not for Corporations legislation until 2031

  • Revises requirements for nonprofit corporations and LLCs to be eligible bidders. To be eligible, the organization must be a/an: 

    • Nonprofit whose main activities must include development and preservation of affordable rental or homeownership housing in California

    • LLC wholly owned by a nonprofit that meets the above requirement 

    • Community land trust 

    • LEHC 

  • Expand affidavit and declaration requirements for eligible bidders to deter fraud. 

  • Authorize the Attorney General, a county counsel, or a city attorney to bring an action to enforce the law. 

In addition to incredible leadership by Assemblymember Mia Bonta, AB 1837 made it through the legislative process thanks to active sponsorship by the California Community Land Trust Network (CACLTN). This bill also benefited from very active engagement on the part of many of the CACLTN member land trusts who have experience purchasing distressed properties to prevent tenant displacement and to steward property as affordable housing. The CACLTN was also supported in this work by their lobbyist Amy Hines-Shaikh of Wildcat Consulting and my law practice. Numerous other people and organizations spoke out in support, advised, lobbied, and supported in other ways. 


For more information about this bill, what it means for various stakeholders, and the groups that worked to make this happen, check out CACLTN’s website.

Naomi Primero & Christina Oatfield