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July 2019 USFN Briefing Follow-up: REO/Eviction

Posted By USFN, Monday, August 12, 2019

Below is a roundup of legislation and case law from July’s REO/Evictions USFN Briefing. Post-webinar downloads and a schedule of upcoming topics may be found on the USFN Briefings webpage.


Legislative Updates

by Kayo Manson-Tompkins, Esq.

The Wolf Firm

USFN Member (CA, ID, OR, WA)

California AB 1482 –Bill to Establish a Statewide Rent Control

i. If passed, Section1946.2 and Section 1947.12 will be added to the Civil Code

  • Would prohibit terminating a lease of a tenant who has occupied the property for at least 12 months without “just cause.”
  • Notice of violation and an opportunity to cure must be sent prior to the notice of termination
  • No fault “just cause” terminations require relocation of at least one month’s rent
  • If no relocation is offered, the notice of termination is void
  • Would not prevent local rules or ordinances that provide a higher level of tenant protections
  • Voids any waiver of rights provisions
  • Limits annual rent increase to 7% plus change in cost of living or 10%, whichever is lower
  • Largest impact on cities that do not already have rent control laws
  • Would include all homes built in Los Angeles between 1978 and 2009, which currently are not covered by Los Angeles rent control laws

ii. Repealed as of January 1, 2023


by Renee Bishop, Esq.

Bendett & McHugh, PC

USFN Member (CT, MA, ME, NH, RI, VT)

House Bill 6996 – An Act Extending the Foreclosure Mediation Program

i. This bill extends the judicial foreclosure mediation program four (4) years to July 1, 2023


House Bill 7179 – An Act Concerning Crumbling Concrete Foundations

 i. This bill makes comprehensive change to various statutes regarding crumbling concrete foundations. The most pertinent of those changes is that it requires the seller of residential property acquired by a judgment of strict foreclosure, foreclosure by sale or by deed in lieu of foreclosure to complete a newly created form regarding the foundation of the property and the potential existence of the chemical pyrrhotite. Completion of the form is only required for those properties located in municipalities that have been identified by the Capitol Region Council Governments as being affected or have potential to be affected by crumbling foundations.


ii. Included in the form is whether the seller has any knowledge related to the presence of pyrrhotite in any concrete foundation on the subject property; if the Seller is aware of any damage or deterioration in any concrete foundation on the subject property; and if the Seller is aware of any repairs or remediation to any concrete foundation on the subject property.


Senate Bill 320 –An Act Concerning Real Estate Closings and Attorneys and Law Firms Preferred by Mortgage Lenders

i. This bill provides that no person shall conduct a real estate closing unless such person is admitted as an attorney in this state. A real estate closing is defined as mortgage loan transaction secured by property in Connecticut, other than a home equity line of credit transaction or any other transaction that does not involve the issuance of mortgagee title insurance policy; or a transaction where consideration is paid to effectuate the change in ownership to real property in Connecticut.


Senate Bill 833 – An Act Concerning Validation of Conveyance Defects Association with an Instrument that was Executed Pursuant to a Power of Attorney.

i. This bill validates deeds, mortgages, assignments and releases recorded after January 1, 1997 executed pursuant to a power of attorney, where the power of attorney was not recorded in the applicable land records. This will happen so long as the deed has been of record for fifteen (15) years and no action to set aside the deed has been commenced. The only exemptions to validation will be (1) if the fiduciary in the deed is also the grantee (self-dealing), or (2) the deed fails to state that the consideration reflecting fair market value.


Senate Bill 1070 – An Act Concerning Abandoned and Blighted Property Stewardship

i. This bill establishes a very detailed legal process for the rehabilitation of abandoned properties in municipalities with populations of at least 35,000 by providing that if an owner of a residential, commercial, or industrial building fails to maintain it in accordance with applicable municipal codes, the Superior Court, upon petition of a party in interest, and after holding a hearing on the same, may appoint a receiver to make the necessary improvements, who may obtain court approved financing to accomplish the same.

ii. Notably, a receiver will not be appointed if the building is subject to a pending foreclosure action by an individual or a nongovernmental entity (which does not appear to be defined).

by Stuart Gordan, Esq.

McCalla Raymer Leibert Pierce, LLC

USFN Member (AL, CA, CT, FL, GA, IL, MS, NV, NJ, NY)

House Bill 492 – Writ Application Deadline

i. Requires applications for execution of a writ of possession to be made within 30 days of the issuance of the writ, unless a writ is accompanied by an affidavit showing good cause for the delay in applying for the writ.


House Bill 346 – Dispossessories Could be Retaliatory

i. Prohibits retaliation by a landlord against a tenant for taking specified actions, and provides for a defense when a dispossessory action is filed within 3 months after the certain action is taken by the tenant. This appears to have broader applicability to the traditional landlord/tenant relationship, but the bill does not contain a clear exception for post-foreclosure dispossessories. Still this applies to situations where there is a lease agreement and therefore does not apply to post-foreclosure evictions, but this is uncertain until there is a court opinion.


by Michael Anselmo, Esq.

Anselmo Lindberg & Associates

USFN Member (IL)

Senate Bill 169 – Aldermanic Notification

i. Amends the Code of Civil Procedure. Replaces everything after the enacting clause with the provisions of the introduced bill and makes the following changes: Deletes language providing that the failure to send a copy of the notice to the alderman or to file an affidavit as required results in a fine of $500 payable to the ward in which the property is located. Provides instead that the failure to send a copy of the notice to the alderman or to file an affidavit as required shall result in a stay of the foreclosure action on a motion of a party or the court; if the foreclosure action has been stayed by an order of the court, the plaintiff shall send the notice by certified mail or by private carrier that provides proof of delivery; and after proof of delivery is tendered to the court, the court shall lift the stay of the foreclosure action.


Public Act 101-97 – Release of Mortgage Request

i. Adds a person authorized by the mortgagor, grantor, heir, legal representative, or assign to the list of those who may request that the mortgagee of real property execute and deliver a release of a mortgage or deed of trust. If any mortgagee or trustee does not, within 30 days (rather than "one month") after the payment of the debt secured by the mortgage or trust deed complies with specific requirements, then it is liable for the sum of $200 to the aggrieved party. The successor in interest to the mortgagee or trustee is not liable for the $200 penalty if it complies with specific requirements within 30 days (rather than "one month") after succeeding to the interest. Effective January 1, 2020.


Case Law Updates

by Michael Anselmo, Esq.

Anselmo Lindberg & Associates

USFN Member (IL)

Santiago v. Deutsche Bank– 1st Dist. No 1-17-3170 (Pending) - UPDATE

1. Keep Chicago Renting Ordinance (KCRO) requires that a lender who purchases property at foreclosure sale with a bona fide tenant residing in it must either 1) pay that tenant $10,600 in relocation expenses, or 2) provide them with a lease for no more than 102% of the prior year’s rental rate.


2. Rent Control Preemption Act (RCPA)states that “A unit of local government, as defined in Section 1 of Article VII of the Illinois Constitution, shall not enact, maintain, or enforce an ordinance or resolution that would have the effect of controlling the amount of rent charged for leasing private residential or commercial property.” (emphasis added) 50 ILCS 825/5


3. Argued that requiring a lender to cap the rental rate at 102% of the tenants’ prior lease is an ordinance that controls rent in violation of the Rent Control Preemption Act.


4. UPDATE –This case is dismissed, due to settlement on behalf of the parties. No further pending appeals at this time.


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