Important Update: California SB 1146 will put the Moon v. Milestone issue to bed (finally)

By: Dennis H. Doss, Esq.

ChrisDoss Law, LLP

Sitting on Governor Newsom's desk is SB 1146 that will amend Civil Code Section 1916.1 to overrule the Moon v. Milestone decision effective January 1, 2025. In the Moon case, the court indicated that any modification or extension by a real estate broker of a loan over 10% was usurious with an exception for purchase money loans where the original broker arranged the extension. When the law goes into effect January 1st, Civil Code Section 1916.1 will give clear usury protection to broker-arranged extensions, modifications and forbearances of loans over 10%.

Note: The amendment is not retroactive so expect some residual challenges. Between now and the end of this year we continue to recommend rewriting loans you would otherwise extend. Of course, if the extension was built into the original broker-arranged loan documentation, we believe you can safely extend.

This article is published as educational material, not legal advice. No attorney-client relationship is express or implied by this article. Consult a knowledgeable attorney before acting on anything in this article.