Selling After a Wildfire: New Protections, Common Scams, and How to Stay Safe

What should you do first when a client wants to sell after a wildfire in Southern California?

Start with safety and documentation, then verify the property’s title, liens, and any disaster related protections before you price, market, or accept offers.

When wildfires hit Southern California, your clients do not just lose property, they lose time, certainty, and leverage. As a realtor or agent, you can protect them by spotting scams early, guiding them toward legitimate relief options, and tightening your transaction workflow. Because of this, California rolled out new wildfire related rules and anti fraud measures that directly affect listings, offer negotiations, and closings.

 

Key Changes at a Glance

• AB 238: Disaster-related mortgage forbearance (up to 12 months) with limits on late fees/default interest and restrictions on certain foreclosure actions.
• AB 851: Limits certain unsolicited offers in covered ZIP Codes (Los Angeles and Ventura areas tied to wildfire emergency orders) and requires a recorded compliance attestation with the deed.
• SB 255: Requires county recorder notification programs statewide by 1/1/2027 (Los Angeles County already has a program) to reduce deed/title fraud risk.
• Wire fraud remains a top closing risk after disasters, so wire verification protocols are non-negotiable.

 

AB 238: Mortgage Forbearance and Foreclosure Limits (What Agents Need to Do)

If your seller is facing wildfire-related hardship, AB 238 allows eligible borrowers (residential property with 4 or fewer units) to request mortgage payment forbearance. Servicers generally must offer up to 90 days initially and extend in 90-day increments, up to 12 months. Because timing is critical, verify the seller’s status early, especially whether a notice of default has already been recorded.

Agent action steps:

• Ask whether forbearance was requested/approved and whether extensions are active.
• Confirm whether a notice of default was recorded before the request (this can affect eligibility).
• Coordinate payoff timing with escrow and lender contacts, because forbearance can change statements and reinstatement figures.
• Tell clients to keep written lender communications and approvals in the transaction file.

Authority resource for clients: California Department of Insurance (disaster insurance and recovery guidance).

 

AB 851: Unsolicited Offer Restrictions (How to Keep Offers Compliant)

AB 851 targets post-disaster predatory buying by prohibiting certain unsolicited offers to purchase residential real property in specified covered ZIP Codes and requiring a signed compliance attestation by buyer and seller. The attestation must be recorded as an attachment to the deed or conveyance at closing. As a result, your file must clearly document how the offer was initiated.

Agent action steps:

• If an offer was ‘out of the blue,’ slow down and verify whether the property is in a covered area.
• Document the offer source (how seller solicited the offer, when, and by what method).
• Route all negotiations through standard forms, disclosures, and escrow, and avoid side agreements.
• Flag the transaction to 805title early if you believe AB 851 applies, so recording attachments are handled correctly.

 

SB 255: Recorder Notifications and Deed Fraud Prevention

SB 255 requires counties to implement recorder notification programs by 1/1/2027 to alert parties when key documents (deeds, mortgages, deeds of trust) are recorded. This helps catch deed fraud quickly, especially when a home is vacant after a fire. Encourage clients to enroll when available and to report unexpected notices immediately.

Agent action steps:

• Recommend recorder notification enrollment (mail or electronic, if offered).
• If the client receives an unexpected recording notice, connect them with title/escrow immediately for verification.
• For vacant properties, increase monitoring frequency and keep communications in writing.

 

Wire Fraud: The Closing Killer Risk (Your Client Facing Checklist)

Wire fraud attempts often increase after disasters. Build a routine that prevents last-minute instruction changes from being acted on.

Wire safety checklist to send every client:

• Never rely on email alone for wire instructions. Verify by phone using a trusted number from an independent source.
• Treat ‘updated wire instructions’ as suspicious until confirmed by voice with escrow.
• Use secure portals when available and ask escrow to explain verification steps at opening.
• Remind clients that 805title will never pressure them to wire immediately without verbal verification.

 

Quick Reference Table

Rule / Risk Area	What Changed	Agent Move
AB 238 (forbearance)	Up to 12 months disaster-related forbearance for eligible loans; limits on late fees/default interest; restrictions on certain foreclosure actions.	Confirm forbearance + NOD status early; coordinate payoff timing with escrow/lender.
AB 851 (unsolicited offers)	Certain unsolicited offers restricted in covered ZIP Codes; signed compliance attestation must be recorded with the deed.	Document offer source; flag early to title/escrow; ensure recording attachments are handled.
SB 255 (recorder notifications)	Counties must implement recording alerts by 1/1/2027 (LA already has a program).	Recommend enrollment; investigate unexpected recordings immediately.
Wire fraud	Post-disaster spoofing and last-minute wire changes are common.	Always verify by phone; never trust emailed changes without confirmation.

 

 

Conclusion: Stay Safe, Stay Informed, and Partner with 805title

Selling your home after a wildfire doesn’t have to feel overwhelming. With new California laws in place to protect homeowners, you now have stronger safeguards against foreclosure, scams, and title fraud. However, navigating post disaster real estate transactions still requires trusted expertise. At 805title, we’re committed to guiding you through every step ensuring your closing is safe, legal, and stress free.

For more details, visit our services page here: 👉 805title