SB 658: Real property impacted by the 2025 Eaton or Palisades Fires: notification of owner’s intent to sell.

This bill would require an owner that sells a property subject to the bill’s provisions to record, or cause to be recorded, a certification of compliance under penalty of perjury at the time of sale, as specified, and would make failure to file the certificate an infraction punishable as specified. By expanding the crime of perjury and creating a new crime, the bill would impose a state-mandated local program.

This bill would impose additional requirements on a qualified entity that purchases, pursuant to these provisions, property that is, or was on January 7, 2025, occupied by tenants. In this regard, the bill would require the qualified entity to retain all existing tenancies and to restore tenancies terminated due to the Eaton or Palisades Fires, as specified. The bill would require the qualified entity to make vacant units of the property affordable to persons and families of specified income levels that would depend on the average rental rate or housing cost of the units, as specified. The bill would require these affordability requirements to be contained in a covenant or restriction recorded against the property at the time of sale. The bill would prohibit the qualified entity from selling the property except to a qualified purchaser, as provided. The bill would make these requirements applicable to successive owners.

This bill, on or before July 1, 2026, would require the cities that have jurisdiction in the area and the County of Los Angeles to jointly convene a working group consisting of individuals and organizations representing individuals who were impacted by the fires, as specified, to provide input on the development of guidelines that, upon adoption by the city or county, would govern new development and disposition of single-family property that was damaged or destroyed by the fires and was used as the owner’s primary residence on January 7, 2025, or fire-damaged commercial real property that a qualified entity purchases. By imposing new duties on those cities and the County of Los Angeles, the bill would impose a state-mandated local program. The bill would require a qualified entity that purchases such property, and successive owners, to adhere to those guidelines.

This bill would grant a private cause of action to specified entities to enforce the provisions of the bill, and would allow for civil remedies, as specified.

Existing law imposes various requirements to be satisfied prior to exercising a power of sale under a mortgage or deed of trust. Existing law, with respect to residential real property containing up to 4 dwelling units, requires a mortgagee, trustee, beneficiary, or authorized agent to provide to the mortgagor or trustor a copy of the recorded notice of default and a copy of the recorded notice of sale.

This bill would require a mortgagee, trustee, beneficiary, or authorized agent, within 3 business days of recording a notice of default against multifamily residential real property or fire-damaged commercial real property subject to the bill’s provisions described above, to provide to the mortgagor or trustor a list of qualified entities, and to post a copy of the notice of default in a conspicuous place on the property, as provided. The bill would make these provisions effective for 6 years following the expiration of a declared disaster or state of emergency resulting from the Eaton or Palisades Fires.

The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities.

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.