California SB 1079 is a state law that gives tenants, prospective owner-occupants, and qualifying nonprofits up to 45 days after a foreclosure auction to buy the home before the winning bidder can close. It applies to residential properties with one to four units and is codified primarily at Civil Code Section 2924m. The same law raised the daily fine for letting a foreclosed property fall into disrepair to $10,000.
Before this law, a foreclosure auction was final the moment the gavel fell, and large investors buying properties in bulk had a near-monopoly on the process. SB 1079 changed both pieces: it opened a structured post-auction bidding window for people with a real connection to the home, and it required that covered properties be sold one at a time rather than bundled into investor packages.
Who Can Bid After the Auction
Three categories of buyers qualify under Section 2924m.
An eligible tenant buyer is someone living in the property as their primary residence at the time of the trustee’s sale under a lease or rental agreement signed before the notice of default was recorded. The tenant cannot be the former owner, a close family member of the former owner, or someone acting as an agent for another buyer, and cannot have filed for bankruptcy at any point between the sale and the 45th day after it.1California Legislative Information. California Civil Code 2924m
A prospective owner-occupant is any person who submits a sworn declaration to the trustee stating they will move in as their primary residence within 60 days of the deed being recorded and will live there for at least one year. The same exclusions apply: not the former owner, not a family member, not an employee or officer of the former owner’s entity, and not an agent for someone else.1California Legislative Information. California Civil Code 2924m
Eligible nonprofits and community land trusts can also bid. A nonprofit where an eligible tenant serves as a voting member or director can bid on that tenant’s behalf. Separately, 501(c)(3) corporations headquartered in California with California-resident board members qualify, as do community land trusts. These groups often buy foreclosed homes to keep them affordable or convert them into community-controlled housing.1California Legislative Information. California Civil Code 2924m
How the 45-Day Bidding Window Works
When the winning bidder at auction is not an eligible buyer under Section 2924m, the sale is “not deemed final” for up to 45 days. The window runs in two phases, and which phase you are in changes what you have to bid.
The First 15 Days
Eligible tenant buyers get priority. Within 15 days after the trustee’s sale, a tenant buyer can submit a bid that matches the highest auction bid. Matching is enough; the tenant does not have to exceed it. Alternatively, any eligible buyer can submit a nonbinding written notice of intent to bid during those 15 days, which keeps the full 45-day window open for everyone. If no bid and no notice of intent arrives in that first 15-day period, the original auction sale becomes final.1California Legislative Information. California Civil Code 2924m
Days 16 Through 45
If a notice of intent was filed, prospective owner-occupants, nonprofits, and community land trusts can submit bids through day 45. These bidders must exceed the highest auction bid, not merely match it. If multiple eligible bidders submit bids, the highest one wins. But a tenant buyer who matches the auction price still beats a higher bid from another eligible bidder.1California Legislative Information. California Civil Code 2924m
All bids must reach the trustee by 5:00 p.m. on the 45th day after the sale, or the next business day if the 45th falls on a weekend or holiday. The winning eligible bidder becomes the “last and highest bidder” under the power of sale, and losing bids are returned.1California Legislative Information. California Civil Code 2924m
How to Submit a Bid
The mechanics are tight, and missing any step ends the opportunity.
- Check the trustee’s information within 48 hours. The trustee must post the sale date, the highest auction bid, and a mailing address on the website listed in the notice of sale within 48 hours of the auction, and must keep that information available (including by phone) for at least 45 days.1California Legislative Information. California Civil Code 2924m
- Send a notice of intent within 15 days. A written notice of intent to bid, received by the trustee within 15 days of the sale, keeps the full 45-day window open. Skip this step and the sale can be finalized before you ever submit a bid.
- Line up the full amount in cash. Foreclosure bids under SB 1079 work like auction bids: full payment, typically by cashier’s check, with no financing contingency. Any loan has to be funded and converted to a cashier’s check before the deadline.
- Deliver the bid and a sworn affidavit by day 45. The trustee must receive both by 5:00 p.m. on the 45th day. The affidavit identifies which eligible category you fall into. Tenant buyers match the highest auction bid; every other eligible bidder must exceed it.1California Legislative Information. California Civil Code 2924m
The cash requirement is the biggest practical barrier. Most buyers cannot produce hundreds of thousands of dollars in liquid funds on a few weeks’ notice. Some work with nonprofits or community land trusts that can pool resources. Some use bridge loans to cover the gap between the bid deadline and longer-term financing. FHA 203(k) loans can finance both purchase and renovation of distressed properties, but the loan has to be fully funded before the bid deadline, and the 45-day window leaves very little room for a conventional mortgage approval to close in time.
Until the sale is deemed final, title stays with the former owner or their successor. The trustee cannot record a deed until either the bidding window closes or an eligible buyer’s bid is accepted.1California Legislative Information. California Civil Code 2924m
If You Rent the Home but Cannot Buy It
SB 1079’s bidding rights are only one layer of protection for tenants. A tenant who cannot afford to buy still cannot be forced out overnight.
Under the federal Protecting Tenants at Foreclosure Act, a new owner acquiring a property through foreclosure must give bona fide tenants at least 90 days’ written notice before requiring them to vacate. A lease that runs past the 90 days generally has to be honored to its end, unless the new owner is moving in as a primary residence, in which case the 90-day notice still applies but the lease term does not. A bona fide tenant is one who signed a lease at arm’s length, pays fair market rent, and is not the former owner or a close family member.2FDIC. Protecting Tenants at Foreclosure Act
California Code of Civil Procedure Section 1161b reinforces this at the state level: at least 90 days’ notice before eviction proceedings can begin, and fixed-term leases generally continue through their term. Exceptions apply when the new owner will occupy the property, when the tenant is a family member of the former owner, or when the lease was not made at arm’s length or reflects below-market rent.
The two layers work together. A tenant who wants to buy has up to 45 days to put together a matching bid. A tenant who cannot buy still has at least 90 days before eviction can begin, and longer with a fixed-term lease.
Fines for Neglected Foreclosed Properties
The second half of SB 1079 targets buyers who let foreclosed homes deteriorate. Civil Code Section 2929.3 already let local governments fine owners for failing to maintain vacant foreclosed properties, and SB 1079 raised the maximum penalty to $10,000 per day for ongoing violations.3California State Senate Committee on Judiciary. SB 1079 Senate Judiciary Committee Analysis
A city or county identifies the violation and sends the owner a notice. The owner gets at least 30 days to correct the problem before fines begin, and has the right to a hearing to contest any fine. The local government must consider good-faith efforts to remedy the violation when setting the amount. If a condition threatens public health or safety, the notice period before fines can be shortened.
The provision was aimed at investors who bought foreclosed homes, sat on them for years, and let the properties drag down surrounding blocks. A $10,000 daily fine changes that math.
Risks to Weigh Before You Bid
Homes bought through this process carry risks that traditional buyers rarely face. They are sold as-is. Interior inspections before bidding are usually impossible, and the seller makes no guarantees about condition. Title problems are common: unpaid liens, unresolved claims, and recording errors from the foreclosure process can cloud ownership for months. Title insurance is available but can be more expensive or harder to obtain for foreclosure purchases.
Budget for a title search before committing funds, and assume the property will need some repair work. Buyers who research likely foreclosures ahead of time, arrange financing in advance, and identify a title company before the auction have a real chance in the 45-day window. Buyers who start after seeing the trustee’s sale posting rarely do.