With over 23 years of experience in real estate litigation and foreclosure, one thing has always been true: the longer a lender waits, the harder it gets to enforce a loan. California’s new Civil Code § 2924.13 now lists a familiar rule as the fifth “unlawful practice”:
Conducting or threatening to conduct a foreclosure sale after the statute of limitations has expired.
This isn’t new law. If a lender tries to collect on a loan too late, a borrower already had the right to go to court and stop it. But now, this failure is formally listed as a violation under the statute—and can block a foreclosure if the loan is secured by residential property in a junior position.
So how much time does a lender have?
It depends on what kind of enforcement is involved.
For judicial foreclosure (suing in court), California usually gives 4 to 6 years, depending on the type of note and whether it has a definite due date.
For nonjudicial foreclosure, where a trustee sale happens outside of court, the rule is different:
If the maturity date is recorded in the deed of trust: 10 years
If it’s not recorded: 60 years
Still, most private money loans are short term. To avoid any confusion, the safest rule is to take action within 4 years of the borrower’s default, especially if pursuing the loan through the court system.
The takeaway: review default dates and confirm whether the maturity date is ascertainable from the recorded deed of trust. Foreclosing after time runs out won’t just fail—it may now trigger a violation under § 2924.13.
Follow along as we continue breaking down the rest of this new statute.