SECTIONS 725a-730.5 - California Statutes

CODE OF CIVIL PROCEDURE

SECTION 725a-730.5

725a. The beneficiary or trustee named in a deed of trust or
mortgagee named in a mortgage with power of sale upon real property
or any interest therein to secure a debt or other obligation, or if
there be a successor or successors in interest of such beneficiary,
trustee or mortgagee, then such successor or successors in interest,
shall have the right to bring suit to foreclose the same in the
manner and subject to the provisions, rights and remedies relating to
the foreclosure of a mortgage upon such property.

726. (a) There can be but one form of action for the recovery of
any debt or the enforcement of any right secured by mortgage upon
real property or an estate for years therein, which action shall be
in accordance with the provisions of this chapter. In the action the
court may, by its judgment, direct the sale of the encumbered real
property or estate for years therein (or so much of the real property
or estate for years as may be necessary), and the application of the
proceeds of the sale to the payment of the costs of court, the
expenses of levy and sale, and the amount due plaintiff, including,
where the mortgage provides for the payment of attorney's fees, the
sum for attorney's fees as the court shall find reasonable, not
exceeding the amount named in the mortgage.
(b) The decree for the foreclosure of a mortgage or deed of trust
secured by real property or estate for years therein shall declare
the amount of the indebtedness or right so secured and, unless
judgment for any deficiency there may be between the sale price and
the amount due with costs is waived by the judgment creditor or a
deficiency judgment is prohibited by Section 580b, shall determine
the personal liability of any defendant for the payment of the debt
secured by the mortgage or deed of trust and shall name the
defendants against whom a deficiency judgment may be ordered
following the proceedings prescribed in this section. In the event of
waiver, or if the prohibition of Section 580b is applicable, the
decree shall so declare and there shall be no judgment for a
deficiency. In the event that a deficiency is not waived or
prohibited and it is decreed that any defendant is personally liable
for the debt, then upon application of the plaintiff filed at any
time within three months of the date of the foreclosure sale and
after a hearing thereon at which the court shall take evidence and at
which hearing either party may present evidence as to the fair value
of the real property or estate for years therein sold as of the date
of sale, the court shall render a money judgment against the
defendant or defendants for the amount by which the amount of the
indebtedness with interest and costs of levy and sale and of action
exceeds the fair value of the real property or estate for years
therein sold as of the date of sale. In no event shall the amount of
the judgment, exclusive of interest from the date of sale and of
costs exceed the difference between the amount for which the real
property or estate for years therein was sold and the entire amount
of the indebtedness secured by the mortgage or deed of trust. Notice
of the hearing shall be served upon all defendants who have appeared
in the action and against whom a deficiency judgment is sought, or
upon their attorneys of record, at least 15 days before the date set
for the hearing. Upon application of any party made at least 10 days
before the date set for the hearing the court shall, and upon its own
motion the court at any time may, appoint one of the probate
referees provided for by law to appraise the real property or estate
for years therein sold as of the time of sale. The probate referee
shall file the appraisal with the clerk and the appraisal is
admissible in evidence. The probate referee shall take and subscribe
an oath to be attached to the appraisal that the referee has truly,
honestly and impartially appraised the real property or estate for
years therein to the best of the referee's knowledge and ability. Any
probate referee so appointed may be called and examined as a witness
by any party or by the court itself. The court shall fix the
compensation, in an amount as determined by the court to be
reasonable, but the fees shall not exceed similar fees for similar
services in the community where the services are rendered, which may
be taxed and allowed in like manner as other costs.
(c) No person holding a conveyance from or under the mortgagor of
real property or estate for years therein, or having a lien thereon,
which conveyance or lien does not appear of record in the proper
office at the time of the commencement of the action need be made a
party to the action, and the judgment therein rendered, and the
proceedings therein had, are as conclusive against the person holding
the unrecorded conveyance or lien as if the person had been a party
to the action. Notwithstanding Section 701.630, the sale of the
encumbered real property or estate for years therein does not affect
the interest of a person who holds a conveyance from or under the
mortgagor of the real property or estate for years therein mortgaged,
or has a lien thereon, if the conveyance or lien appears of record
in the proper office at the time of the commencement of the action
and the person holding the recorded conveyance or lien is not made a
party to the action.
(d) If the real property or estate for years therein mortgaged
consists of a single parcel, or two or more parcels, situated in two
or more counties, the court may, in its judgment, direct the whole
thereof to be sold in one of the counties, and upon these
proceedings, and with like effect, as if the whole of the property
were situated in that county.
(e) If a deficiency judgment is waived or prohibited, the real
property or estate for years therein shall be sold as provided in
Section 716.020. If a deficiency judgment is not waived or
prohibited, the real property or estate for years therein shall be
sold subject to the right of redemption as provided in Sections
729.010 to 729.090, inclusive.
(f) Notwithstanding this section or any other provision of law to
the contrary, any person authorized by this state to make or arrange
loans secured by real property or any successor in interest thereto,
that originates, acquires, or purchases, in whole or in part, any
loan secured directly or collaterally, in whole or in part, by a
mortgage or deed of trust on real property or an estate for years
therein, may bring an action for recovery of damages, including
exemplary damages not to exceed 50 percent of the actual damages,
against a borrower where the action is based on fraud under Section
1572 of the Civil Code and the fraudulent conduct by the borrower
induced the original lender to make that loan.
(g) Subdivision (f) does not apply to loans secured by
single-family, owner-occupied residential real property, when the
property is actually occupied by the borrower as represented to the
lender in order to obtain the loan and the loan is for an amount of
one hundred fifty thousand dollars ($150,000) or less, as adjusted
annually, commencing on January 1, 1987, to the Consumer Price Index
as published by the United States Department of Labor.
(h) Any action maintained pursuant to subdivision (f) for damages
shall not constitute a money judgment for deficiency, or a deficiency
judgment within the meaning of Section 580a, 580b, or 580d of the
Code of Civil Procedure.

726.5. (a) Notwithstanding subdivision (a) of Section 726 or any
other provision of law, except subdivision (d) of this section, a
secured lender may elect between the following where the real
property security is environmentally impaired and the borrower's
obligations to the secured lender are in default:
(1) (A) Waiver of its lien against (i) any parcel of real property
security that is environmentally impaired or is an affected parcel,
and (ii) all or any portion of the fixtures and personal property
attached to the parcels; and
(B) Exercise of (i) the rights and remedies of an unsecured
creditor, including reduction of its claim against the borrower to
judgment, and (ii) any other rights and remedies permitted by law.
(2) Exercise of (i) the rights and remedies of a creditor secured
by a deed of trust or mortgage and, if applicable, a lien against
fixtures or personal property attached to the real property security,
and (ii) any other rights and remedies permitted by law.
(b) Before the secured lender may waive its lien against any
parcel of real property security pursuant to paragraph (1) of
subdivision (a) on the basis of the environmental impairment
contemplated by paragraph (3) of subdivision (e), (i) the secured
lender shall provide written notice of the default to the borrower,
and (ii) the value of the subject real property security shall be
established and its environmentally impaired status shall be
confirmed by an order of a court of competent jurisdiction in an
action brought by the secured lender against the borrower. The
complaint for a valuation and confirmation action may include causes
of action for a money judgment for all or part of the secured
obligation, in which case the waiver of the secured lender's liens
under paragraph (1) of subdivision (a) shall result only if and when
a final money judgment is obtained against the borrower.
(c) If a secured lender elects the rights and remedies permitted
by paragraph (1) of subdivision (a) and the borrower's obligations
are also secured by other real property security, fixtures, or
personal property, the secured lender shall first foreclose against
the additional collateral to the extent required by applicable law in
which case the amount of the judgment of the secured lender pursuant
to paragraph (1) of subdivision (a) shall be limited to the extent
Section 580a or 580d, or subdivision (b) of Section 726 apply to the
foreclosures of additional real property security. The borrower may
waive or modify the foreclosure requirements of this subdivision
provided that the waiver or modification is in writing and signed by
the borrower after default.
(d) Subdivision (a) shall be inapplicable if all of the following
are true:
(1) The release or threatened release was not knowingly or
negligently caused or contributed to, or knowingly or willfully
permitted or acquiesced to, by any of the following:
(A) The borrower or any related party.
(B) Any affiliate or agent of the borrower or any related party.
(2) In conjunction with the making, renewal, or modification of
the loan, extension of credit, guaranty, or other obligation secured
by the real property security, neither the borrower, any related
party, nor any affiliate or agent of either the borrower or any
related party had actual knowledge or notice of the release or
threatened release, or if a person had knowledge or notice of the
release or threatened release, the borrower made written disclosure
thereof to the secured lender after the secured lender's written
request for information concerning the environmental condition of the
real property security, or the secured lender otherwise obtained
actual knowledge thereof, prior to the making, renewal, or
modification of the obligation.
(e) For purposes of this section:
(1) "Affected parcel" means any portion of a parcel of real
property security that is (A) contiguous to the environmentally
impaired parcel, even if separated by roads, streets, utility
easements, or railroad rights-of-way, (B) part of an approved or
proposed subdivision within the meaning of Section 66424 of the
Government Code, of which the environmentally impaired parcel is also
a part, or (C) within 2,000 feet of the environmentally impaired
parcel.
(2) "Borrower" means the trustor under a deed of trust, or a
mortgagor under a mortgage, where the deed of trust or mortgage
encumbers real property security and secures the performance of the
trustor or mortgagor under a loan, extension of credit, guaranty, or
other obligation. The term includes any successor-in-interest of the
trustor or mortgagor to the real property security before the deed of
trust or mortgage has been discharged, reconveyed, or foreclosed
upon.
(3) "Environmentally impaired" means that the estimated costs to
clean up and remediate a past or present release or threatened
release of any hazardous substance into, onto, beneath, or from the
real property security, not disclosed in writing to, or otherwise
actually known by, the secured lender prior to the making of the loan
or extension of credit secured by the real property security,
exceeds 25 percent of the higher of the aggregate fair market value
of all security for the loan or extension of credit (A) at the time
of the making of the loan or extension of credit, or (B) at the time
of the discovery of the release or threatened release by the secured
lender. For the purposes of this definition, the estimated cost to
clean up and remediate the contamination caused by the release or
threatened release shall include only those costs that would be
incurred reasonably and in good faith, and fair market value shall be
determined without giving consideration to the release or threatened
release, and shall be exclusive of the amount of all liens and
encumbrances against the security that are senior in priority to the
lien of the secured lender. Notwithstanding the foregoing, the real
property security for any loan or extension of credit secured by a
single parcel of real property which is included in the National
Priorities List pursuant to Section 9605 of Title 42 of the United
States Code, or in any list published by the Department of Toxic
Substances Control pursuant to subdivision (b) of Section 25356 of
the Health and Safety Code, shall be deemed to be environmentally
impaired.
(4) "Hazardous substance" means any of the following:
(A) Any "hazardous substance" as defined in subdivision (h) of
Section 25281 of the Health and Safety Code.
(B) Any "waste" as defined in subdivision (d) of Section 13050 of
the Water Code.
(C) Petroleum, including crude oil or any fraction thereof,
natural gas, natural gas liquids, liquefied natural gas, or synthetic
gas usable for fuel, or any mixture thereof.
(5) "Real property security" means any real property and
improvements, other than a separate interest and any related interest
in the common area of a residential common interest development, as
the terms "separate interest," "common area," and "common interest
development" are defined in Section 1351 of the Civil Code, or real
property which contains only 1 to 15 dwelling units, which in either
case (A) is solely used (i) for residential purposes, or (ii) if
reasonably contemplated by the parties to the deed of trust or
mortgage, for residential purposes as well as limited agricultural or
commercial purposes incidental thereto, and (B) is the subject of an
issued certificate of occupancy unless the dwelling is to be owned
and occupied by the borrower.
(6) "Related party" means any person who shares an ownership
interest with the borrower in the real property security, or is a
partner or joint venturer with the borrower in a partnership or joint
venture, the business of which includes the acquisition,
development, use, lease, or sale of the real property security.
(7) "Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching,
dumping, or disposing into the environment, including continuing
migration, of hazardous substances into, onto, or through soil,
surface water, or groundwater. The term does not include actions
directly relating to the incorporation in a lawful manner of building
materials into a permanent improvement to the real property
security.
(8) "Secured lender" means the beneficiary under a deed of trust
against the real property security, or the mortgagee under a mortgage
against the real property security, and any successor-in-interest of
the beneficiary or mortgagee to the deed of trust or mortgage.
(f) This section shall not be construed to invalidate or otherwise
affect in any manner any rights or obligations arising under
contract in connection with a loan or extension of credit, including,
without limitation, provisions limiting recourse.
(g) This section shall only apply to loans, extensions of credit,
guaranties, or other obligations secured by real property security
made, renewed, or modified on or after January 1, 1992.

727. If there be surplus money remaining, after payment of the
amount due on the mortgage, lien, or incumbrance, with costs, the
Court may cause the same to be paid to the person entitled to it, and
in the meantime may direct it to be deposited in Court.

728. If the debt for which the mortgage, lien, or incumbrance is
held is not all due, so soon as sufficient of the property has been
sold to pay the amount due, with costs, the sale must cease; and
afterwards, as often as more becomes due, for principal or interest,
the Court may, on motion, order more to be sold. But if the property
cannot be sold in portions, without injury to the parties, the whole
may be ordered to be sold in the first instance, and the entire debt
and costs paid, there being a rebate of interest where such rebate is
proper.

729.010. (a) If the decree of foreclosure of a mortgage or deed of
trust on real property pursuant to Section 726 determines that a
deficiency judgment may be ordered against the defendant, the real
property (other than a leasehold estate with an unexpired term of
less than two years at the time of levy) shall be sold subject to the
right of redemption.
(b) If the property is to be sold subject to the right of
redemption, the sale is governed by Section 716.020, except that:
(1) The notice of sale of the property shall state that the
property will be sold subject to the right of redemption and shall
state the amount of the secured indebtedness with interest and costs.
(2) Notice of sale may be given upon entry of the judgment for
sale of the property and the provision of Section 701.545 delaying
notice of sale does not apply.
(3) Notice of sale may be given to persons having liens on the
property upon entry of the judgment for sale of the property and the
provision of subdivision (h) of Section 701.540 delaying such notice
does not apply.

729.020. Property sold subject to the right of redemption may be
redeemed only by the judgment debtor or the judgment debtor's
successor in interest. For the purpose of this article, the purchaser
of the property at the foreclosure sale is not a successor in
interest.

729.030. The redemption period during which property may be
redeemed from a foreclosure sale under this chapter ends:
(a) Three months after the date of sale if the proceeds of the
sale are sufficient to satisfy the secured indebtedness with interest
and costs of action and of sale.
(b) One year after the date of sale if the proceeds of the sale
are not sufficient to satisfy the secured indebtedness with interest
and costs of action and of sale.

729.035. Notwithstanding any provision of law to the contrary, the
sale of a separate interest in a common interest development is
subject to the right of redemption within 90 days after the sale if
the sale arises from a foreclosure by the association of a common
interest development pursuant to subdivision (g) of Section 1367.1 of
the Civil Code, subject to the conditions of Section 1367.4 of the
Civil Code.

729.040. (a) Notwithstanding Section 701.660, when the purchaser of
an interest in real property sold subject to the right of redemption
pays the amount due, the levying officer conducting the sale shall
execute and deliver a certificate of sale to the purchaser and record
a duplicate of the certificate of sale in the office of the county
recorder.
(b) The certificate of sale shall contain either:
(1) In the case of a judicial foreclosure, the information
required by Section 701.670.
(2) In the case of a nonjudicial foreclosure, all of the
information required by subdivisions (c), (d), and (e) of Section
701.670.
(c) In addition to the information required by subdivision (b),
the certificate of sale shall also contain the following:
(1) The price paid for each distinct lot or parcel of real
property sold subject to the right of redemption.
(2) The total price paid.
(3) A statement that the property is subject to the right of
redemption, indicating the applicable redemption period.

729.050. If property is sold subject to the right of redemption,
promptly after the sale the levying officer or trustee who conducted
the sale shall serve notice of the right of redemption on the
judgment debtor. Service shall be made personally or by mail. The
notice of the right of redemption shall indicate the applicable
redemption period.

729.060. (a) A person who seeks to redeem the property shall
deposit the redemption price with the levying officer who conducted
the sale before the expiration of the redemption period. If a
successor in interest to the judgment debtor seeks to redeem the
property, the successor in interest shall, at the time the redemption
price is deposited, file with the levying officer either (1) a
certified copy of a recorded conveyance or (2) a copy of an
assignment or any other evidence of the interest verified by an
affidavit of the successor in interest or of a subscribing witness
thereto.
(b) The redemption price is the total of the following amounts,
less any offset allowed under subdivision (c).
(1) The purchase price at the sale.
(2) The amount of any assessments or taxes and reasonable amounts
for fire insurance, maintenance, upkeep, and repair of improvements
on the property.
(3) Any amount paid by the purchaser on a prior obligation secured
by the property to the extent that the payment was necessary for the
protection of the purchaser's interest.
(4) Interest on the amounts described in paragraphs (1), (2), and
(3) at the rate of interest on money judgments from the time such
amount was paid until the date the deposit is made.
(5) If the purchaser at the sale has any liens subordinate to the
lien under which the property was sold, the amount of the purchaser's
lien, plus interest at the rate of interest on money judgments from
the date of the sale until the date the deposit is made.
(c) Rents and profits from the property paid to the purchaser or
the value of the use and occupation of the property to the purchaser
may be offset against the amounts described in subdivision (b).

729.070. (a) If the purchaser and the person seeking to redeem the
property disagree on the redemption price or as to whether the person
is entitled to redeem the property, or if the purchaser refuses the
tender of the redemption price pursuant to Section 729.080, the
person seeking to redeem may file a petition with the court for an
order determining the redemption price or whether the person is
entitled to redeem the property. The petition shall be filed before
the expiration of the redemption period. At the time the petition is
filed, the petitioner shall deposit the undisputed amount of the
redemption price with the levying officer, if deposit has not
previously been made, and give written notice to the levying officer
or trustee of the filing of the petition.
(b) The petition shall be in writing and shall include the
following statements:
(1) The amounts demanded to which the person seeking to redeem
objects and the reasons for the objection.
(2) Any amounts offset to which the purchaser objects and the
justification for the offset.
(3) The status of the petitioner that qualifies the petitioner to
redeem the property. A copy of the papers required by subdivision (a)
of Section 729.060 shall be filed with the petition.
(c) The hearing on the petition shall be held not later than 20
days after the date the petition was filed unless continued by the
court for good cause.
(d) Not less than 10 days before the hearing, the person seeking
to redeem the property shall personally serve on the purchaser a copy
of the petition together with a notice of the time and place of the
hearing.
(e) At the hearing on the petition, the person seeking to redeem
the property has the burden of proof.
(f) At the conclusion of the hearing, the court shall determine by
order the amount required to redeem the property. The determination
shall be made upon affidavit or evidence satisfactory to the court.
(g) If an amount in addition to that deposited with the levying
officer is required to redeem the property, the person seeking to
redeem shall, within 10 days after the issuance of the order, pay the
additional amount to the levying officer.

729.080. (a) If the redemption price is not deposited pursuant to
Section 729.060 before the expiration of the redemption period, or if
no additional deposit is made pursuant to subdivision (g) of Section
729.070 before the expiration of the time provided, the levying
officer who conducted the sale shall promptly execute and deliver to
the purchaser a deed of sale that complies with the requirements of
Section 701.670, or the nonjudicial foreclosure trustee pursuant to
Section 729.035 shall deliver an executed trustee's deed and comply
with the requirements of Section 2924j of the Civil Code.
(b) If the person seeking to redeem the property deposits the
redemption price pursuant to Section 729.060 or 729.070 during the
redemption period, the levying officer shall tender the deposit to
the purchaser. If the purchaser accepts the tender or if the
redemption price determined by court order is tendered, the levying
officer or trustee shall promptly execute and deliver a certificate
of redemption to the person seeking to redeem and shall immediately
record a duplicate of the certificate in the office of the recorder
of the county where the property is located.
(c) Tender of the redemption price determined by court order or
agreed upon by the purchaser and the person seeking to redeem the
property is equivalent to payment. If the tender is refused, the
levying officer shall deposit the amount tendered with the county
treasurer of the county where the property is located, payable to the
order of the purchaser. If the amount deposited is not claimed by
the purchaser, or the legal representative of the purchaser, within
five years after the deposit is made, by making application to the
treasurer or other official designated by the county, it shall be
paid into the general fund of the county.
(d) Except as provided in subdivision (e), upon redemption the
effect of the sale is terminated and the person who redeemed the
property is restored to the estate therein sold at the sale.
(e) Liens extinguished by the sale, as provided in Section
701.630, do not reattach to the property after redemption, and the
property that was subject to the extinguished lien may not be applied
to the satisfaction of the claim or judgment under which the lien
was created.

729.090. (a) From the time of the sale until a redemption, the
purchaser is entitled to receive from the person in possession the
rents and profits from the property or the value of the use and
occupation of the property.
(b) Notwithstanding subdivision (a), the purchaser is liable to
the person who redeems for any rents or profits that have been
received by the purchaser pursuant to subdivision (a).
(c) The purchaser, from the time of sale until redemption, is
entitled to enter the property during reasonable hours to repair and
maintain the premises and is entitled to an order restraining waste
on the property from the court. Such order may be granted with or
without notice in the discretion of the court.

730. In all cases of foreclosure of mortgage the attorney's fee
shall be fixed by the court in which the proceedings are had, any
stipulation in the mortgage to the contrary notwithstanding.

730.5. Except as otherwise provided by Section 9604 of the
Commercial Code, none of the provisions of this chapter or of Section
580a, 580b, 580c, or 580d applies to any security interest in
personal property or fixtures governed by the Commercial Code.