California Tenant Rights During Rental Property Foreclosure
The fact that you are paying your rent does not mean that the owner of the property you live in is keeping up with his mortgage payments. If your landlord defaults on his mortgage payments, he can receive a "Notice of Default," which means that the property will be foreclosed if the rent owed is not paid. In California, tenants do not have many rights in this situation.
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Notice to Tenants of Foreclosure
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There is no law that says that the landlord must inform you that he is defaulting on his mortgage and the property may be foreclosed. You may not know that your tenancy in your home is being threatened until you see a "Notice of Trustee Sale" sign posted on your property. This means that the property will be auctioned.
Your Lease
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If your rental agreement is month-to-month, you need only provide 30 days notice in writing in order to terminate your lease. If you have a fixed term agreement and there are still months until the lease ends, you should speak to your landlord about leaving early. Your landlord's default does not terminate the lease agreement automatically.
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New Ownership of the Property
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During foreclosure, the property may be purchased by a new owner or it may be transferred to the mortgage lender. California law allows either of these parties to evict most tenants. You will receive 30 days notice that you must vacate the property. This is the usual outcome for properties where the lender takes possession. If you are evicted, you must move out within the specified time. It does not matter how long you have lived in the property or whether your fixed-term lease has not yet expired.
Exceptions
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If you signed your lease before the date that your landlord took out the mortgage that he defaulted on, you must be allowed to stay until the end of the lease. If you are a Section 8 tenant, which means that you receive Public Housing or Housing Choice Vouchers, the lender may not kick you out. It is advisable that you contact a lawyer in order to exercise your rights in these situations. If you live in a rent controlled or "just cause" community, you cannot be forced to vacate just because of foreclosure. Contact the Rent Control or Stabilization Board to find out if this applies to you.
Security Deposit
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You are entitled by law to receive your security deposit from the new owner of the property. It does not matter whether the owner did not transfer the deposit from your previous landlord. If you do not get the deposit back within three weeks after your move-out date, you should sue the owner of the property. You can do this through Small Claims Court.
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References
- Photo Credit apartment building image by Gina Smith from Fotolia.com
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Comments
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My landlord was nice enough to tell me about the foreclosure. I recently was visited by the realtor assigned to the property and she said she would see about negotiating with the bank a deal to give me 2500.00 if I move out by October 3rd. I don't feel right signing this agreement becouse 30 days doesn't seem like a lot of time and I still have nowhere to move. Can I refuse to sign and stay to see if the new owner will rent to me?
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The National Law is 90 days before a new owner can evict renters.
