Tenants’ Rights in Foreclosed On Properties

Tenants’ Rights in Foreclosed On Properties

Tenants’ Rights in Foreclosed On Properties

Renters Rights In California Properties

Quite often, we get questions from tenants who live in foreclosed homes about what rights they have. We hear stories of banks, real estate agents, and investors pressuring tenants to move or feeding them false information about their rights.

To clarify things we highlighted some of the rights that renters have if they live in distressed homes whether they be foreclosed, short sale deed-in-lieu.

Firstly, do your due diligence. Get information from a knowledgeable source such as HERA who can also provide legal assistance.

Make sure that you know who you are talking to. Don’t believe someone says that they own the property unless they show proof such as recorded Trustee’s deed.

For tenants rights, cities such as San Francisco and Oakland have local strict tenant laws so be sure to connect with the local tenants union.

For the state of California:

In Just Cause Eviction Jurisdictions (where good cause for eviction is required): no eviction permitted based on foreclosure.

Tenants in non-just cause eviction jurisdictions who live in buildings foreclosed on before May 20th, 2009, have a right to 60 days notice to quit before the new owner is permitted to file an eviction action in court.

Helping Families Save Their Home Act Of 2009

All tenants in buildings foreclosed on after May 20th, 2009, have the following new rights under the “Helping Families Save Their Home Act of 2009”:

Tenants with a lease have a right to stay in unit until end of lease, although the lease may be terminated on 90 days’ notice by a purchaser who will occupy the unit as his/her primary residence.

Tenants with expiring or month-to-month leases are entitled to a 90 day notice to quit before the new owner is permitted to file an eviction action in court.

For Section 8 tenants, owners cannot use foreclosure as good cause to evict. The new owner must respect existing Section 8 leases and give a 90 day notice to quit to Section 8 tenants with expiring leases. The contract with the Housing Agency remains in effect as to the successor in interest (new owner of the property) after foreclosure.

Tenants’ Rights in Foreclosed On Properties

Tenants’ Rights in Foreclosed On Properties

Tenants’ Rights in Foreclosed On Properties

Tenants’ Rights in Foreclosed On Properties

Tenants’ Rights in Foreclosed On Properties

Tenants’ Rights in Foreclosed On Properties

Tenants’ Rights in Foreclosed On Properties

Tenants’ Rights in Foreclosed On Properties

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2 Comments

Filed under Banks, California, Foreclosure, pre-foreclosure, San Francisco, short sales

2 responses to “Tenants’ Rights in Foreclosed On Properties

  1. Vic Pasnick

    Question: Say a seller completes a short sale, and gets a stipend from the bank. It is arms length, no “buyback” clause. Can the investor legally rent back the home to that seller? Will that interfere with the seller getting their “moving money” from the bank? (since they are not moving)
    Please post any experience or advice. Thank You!

    • Hi Vic,

      We asked a few legal professionals as well as a HUD certified counselor and they all reported that the investor may NOT lease back the home to the former owner unless specifically agreed to by the bank. Bank of America among other banks has an addendum stating that the short selling seller may not live in the home again whether that is via re-purchasing or renting. We have seen some non-profits purchase from the bank then re-sell (or lease-back) to the former owners but that is through a non-profit. Any owner and seller doing otherwise may be committing fraud and may wish to consult a good real estate attorney.

      As far as the “moving money” that may be a moot point if they are staying in the home. The moving money would be secondary if both parties are ignoring the arms length documentation that they probably signed.

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