Cal. Code Regs. Tit. 21, § 1487 - Priority 7: Sales to Former Tenants

(a) Offer at Priority 7. When Priority 7 is specified as the next priority by §§ 1477.1, 1477.2, or 1477.3, as applicable, then all Surplus Residential Properties not already sold shall be next offered to former Tenants at Fair Market Value pursuant to this section.

(b) Eligibility Criteria to Receive a Sales Contract. To be eligible to receive a sales contract to purchase at Priority 7, former Tenants shall:

(1) have no outstanding rent obligations due to the Department; and

(2) have been in full compliance with the terms and conditions of the lease or rental agreement at the time the former Tenant vacated the property; and

(3) have provided a written response that meets the criteria in both § 1478(d) and 1478(f); and

(4) not have already purchased a Surplus Residential Property pursuant to this chapter; and

(5) have been a Tenant at the Surplus Residential Property; and

(6) have provided a loan prequalification letter from a lender showing the mortgage loan dollar amount for which the former Tenant is qualified; and

(7) have provided proof of funds for lender required down payment for a mortgage loan.

(c) Time to Provide Documentation. A former Tenant wanting to purchase at Priority 7 shall provide the prequalification letter and proof of funds specified in (b)(6)-(7) to the Department within 30 calendar days of receiving a written request from the Department.

(d) Determining Eligibility to Receive a Sales Contract. The Department will determine if a former Tenant is eligible to receive a sales contract to purchase at Priority 7.

(e) Tenants with Equal Priority. If more than one former Tenant is eligible to receive a sales contract to purchase at Priority 7, then priority is given as follows:

(1) To the former Tenant who most recently occupied the property; then

(2) To the former Tenant who makes the highest price bid on the property.

(f) Sales Contract. The Department will send a sales contract to the former Tenant who has priority to purchase the property pursuant to (e). The sales contract shall be executed and returned to the Department within 30 calendar days of the date the Department sends the contract.

(g) Escrow. Upon execution of the contract, the former Tenant will have 120 calendar days to close escrow. Upon written request, the Department will provide an additional 30 calendar days to close escrow.

(h) Closing Costs and Escrow Fees. The Department will pay: one-half of the escrow fees; all seller notary fees; termite inspection; termite work; and documentary transfer tax.

(i) Nonperformance. If a former Tenant fails to timely execute a sales contract in the time provided in (f) or fails to close escrow in the time provided in (g), then:

(1) The sales contract is void.

(2) The Department will award the property to the next eligible former Tenant pursuant to (e) and send a sales contract pursuant to (f).

(3) If there is no other eligible former Tenant, then the property will proceed to Priority 8.

(j) No Warranty. Any Priority 7 sale is "as-is" and without warranty.

Notes

Cal. Code Regs. Tit. 21, § 1487

1. New section filed 7-26-2016; operative 7-26-2016 pursuant to Government Code section 11343.4(b)(3) (Register 2016, No. 31).
2. Repealer and new section filed 12-13-2021 as an emergency; operative 12-13-2021 (Register 2021, No. 51). Pursuant to Government Code Section 54237.10, this is a statutorily deemed emergency and the emergency language remains in effect until 12-14-2023. A Certificate of Compliance must be transmitted to OAL by 12-13-2023 or emergency language will be repealed by operation of law on the following day.
3. Amendment of subsection (a) and NOTE filed 4-7-2022 as an emergency; operative 4-7-2022 (Register 2022, No. 14). Pursuant to Government Code section 54239.4(f), this is a statutorily deemed emergency and the emergency language remains in effect until 4-7-2024. A Certificate of Compliance must be transmitted to OAL by 4-7-2024 or emergency language will be repealed by operation of law on the following day.
4. Refiling of 4-7-2022 emergency amendments, including amendment of section NOTE, on 7-3-2023 as an emergency; operative 7-3-2023 (Register 2023, No. 27). Pursuant to Government Code section 54239.5(e), this is a statutorily deemed emergency and the emergency language remains in effect until 9-30-2024. A Certificate of Compliance must be transmitted to OAL by 9-30-2024 or emergency language will be repealed by operation of law on the following day.

Note: Authority cited: Sections 54237, 54237.10, 54239.4 and 54239.5, Government Code. Reference: Sections 54236, 54237, 54238.4, 54239.4 and 54239.5, Government Code; and Article XVI Section 6, California Constitution.

1. New section filed 7-26-2016; operative 7/26/2016 pursuant to Government Code section 11343.4(b)(3) (Register 2016, No. 31).
2. Repealer and new section filed 12-13-2021 as an emergency; operative 12/13/2021 (Register 2021, No. 51). Pursuant to Government Code Section 54237.10, this is a statutorily deemed emergency and the emergency language remains in effect until 12-14-2023. A Certificate of Compliance must be transmitted to OAL by 12-13-2023 or emergency language will be repealed by operation of law on the following day.
3. Amendment of subsection (a) and Note filed 4-7-2022 as an emergency; operative 4/7/2022 (Register 2022, No. 14). Pursuant to Government Code section 54239.4(f), this is a statutorily deemed emergency and the emergency language remains in effect until 4-7-2024. A Certificate of Compliance must be transmitted to OAL by 4-7-2024 or emergency language will be repealed by operation of law on the following day.
4. Refiling of 4-7-2022 emergency amendments, including amendment of section Note, on 7-3-2023 as an emergency; operative 7/3/2023 (Register 2023, No. 27). Pursuant to Government Code section 54239.5(e), this is a statutorily deemed emergency and the emergency language remains in effect until 9-30-2024. A Certificate of Compliance must be transmitted to OAL by 9-30-2024 or emergency language will be repealed by operation of law on the following day.