2023 California Code › Health and Safety Code - HSC › DIVISION 31 - HOUSING AND HOME FINANCE › PART 3 - CALIFORNIA HOUSING FINANCE AGENCY › CHAPTER 5 - Financing of Housing Developments and Residential Structures › ARTICLE 5 - Supervision of Housing Sponsors › Section 51205.

51205. (a)  The agency may institute any action or proceeding pursuant to applicable provisions of law against any housing sponsor receiving or assuming a loan under this part in any court of competent jurisdiction in order to enforce this part or the terms and provisions of any contract between the agency and the housing sponsor, to foreclose its mortgage, or to otherwise protect the public interest or the occupants of the housing development. Where necessary to protect the interests of the agency, it may, in connection with the action or proceeding, apply to the court for the appointment of a receiver to take over, manage, operate, and maintain the affairs of the housing sponsor of a rental or cooperative housing development. No receiver shall be appointed unless approved by the agency.
(b)  (1)  In the event of the reorganization of any housing sponsor, to the extent permitted by law, that reorganization shall be subject to the supervision and control of the agency. No reorganization of a housing sponsor shall be effected without the prior written consent of the agency.
(2)  The agency may provide in its loan agreements that, in the event of a judgment against any housing sponsor in any action to which the agency is not a party, there shall be no sale of the housing development or any portion thereof, except upon 60 days’ written notice to the agency. Upon receipt of notice, the agency or Attorney General shall take steps that, in its judgment, are necessary to protect the rights of all parties.
(c)  Notwithstanding any other provisions of law, if, prior to foreclosing on any collateral provided by a housing sponsor, the agency institutes any judicial proceeding or takes any action against a housing sponsor to enforce compliance with the obligations set out in subdivision (d) or to collect or offset any sum owed the agency as a result of any violation of any obligation set out in subdivision (d), that remedy or action shall not constitute an action within the meaning of subdivision (a) of Section 726 of the Code of Civil Procedure, or in any way constitute a violation of the intent or purposes of Section 726 of the Code of Civil Procedure, or constitute a money judgment for a deficiency or a deficiency judgment within the meaning of Section 580a, 580b, or 580d of, or subdivision (b) of Section 726 of, the Code of Civil Procedure. However, the above-referenced provisions of the Code of Civil Procedure shall apply to any judicial proceeding instituted, or nonjudicial foreclosure action taken, by the agency to collect the principal and interest due on the mortgage loan with the housing sponsor.
(d)  Subdivision (c) shall apply to the obligations of the housing sponsor to do any or all of the following:
(1)  Establish a schedule of rents, tenant standards and tenant selection process, and terms of occupancy, and to provide bilingual services and publications for tenants, pursuant to Section 51200.
(2)  Permit the agency to inspect the premises, books, and records; supervise the day-to-day operation and maintenance of the housing financed by the agency, and to pay the fees to defray the cost thereof, pursuant to subdivisions (a) to (d), inclusive, of Section 51201.
(3)  Comply with the provisions of federal, state, or local laws and ordinances, with the rules and regulations of the agency, or with the terms of any contract with the agency, pursuant to subdivisions (e) and (f) of Section 51201.
(4)  Adhere to the limitation on earnings required by Section 51202 or by the agency’s regulatory agreement, or both.
(5)  Turn over managerial and financial control to the agency pursuant to Section 51203.
(6)  Properly certify development costs pursuant to Section 51204.
(7)  Remit earned surplus to the agency as required by Section 51206.
(e)  This section shall apply to housing sponsors, as defined in Section 50074 and as used in Chapter 6.7 (commencing with Section 51325).
(f)  Notwithstanding any other provision of law, the prevailing party in any action instituted pursuant to this section shall be awarded costs and reasonable attorney’s fees, in an amount to be determined in the court’s discretion.
(g)  As used in this section, “mortgage loan” shall be defined as in Section 50086.
(Amended by Stats. 1993, Ch. 649, Sec. 1. Effective January 1, 1994.)