[quote=SK in CV
The only time I have ever seen a claim for a deficiency after a non-judicial foreclosure on commercial property is by a junior lien holder, when the non-judicial foreclosure was by a senior lien holder. I’m unaware of any exemption to California’s one-action rule that applies to commercial property. It might exist. Can you cite that exemption?[/quote]
The one action rule (CCP 726) is not really an anti-deficency statute, it is a statute that requires a lender to proceed with foreclosure before seeking other remedies such a personal liability. The anti-deficency protection you are talking about, no deficiency claim against the borrower after a non-judicial forecloure, is CCP 580d.
But CCP 580d only applies to the borrower, not “true” third party guarantors. This issue has been litigated often in California, but if you want to see a recent application and interesting explanation in a recent California published decision, Talbott v. Hustwit (2008)164 Cal.App.4th 148 is a good one:
And to be clear, a “true guarantor” is a third party, not the borrower itself. I stand by my statement that most commercial real estate loans I see that involve LLCs/corps also involve personal guarantees.
