Legal Question in Landlord & Tenant Law in California

I used to see a lot of these questions on this forum, but in recent months they dropped off. Strictly speaking, it is not illegal for a landlord to collect rent and not pay his mortgage. The lender, of all people, may have the ability to pursue the landlord for what is sometimes referred to as 'rent skimming,' but in most cases, you as the tenant don't have the right to sue the landlord, nor stop paying your rent because of the failure to pay the mortgage. You may have other causes of action - for fraud, misrepresentation, and other acts which mislead you to rent a home you know you will have to leave soon, but there are a lot of facts that would have to be reviewed and analyzed before reaching a legal conclusion that you have any rights against the landlord. My best suggestion is this - contact a local attorney in your area who represents tenants to discuss the myriad of issues and options that may exist. Good luck.

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The "rent skimming" Mr. Gibbs refers to is defined in Civil Code section 890 as follows:

1) "Rent skimming" means using revenue received from the rental of a parcel of residential real property at any time during the first year period after acquiring that property without first applying the revenue or an equivalent amount to the payments due on all mortgages and deeds of trust encumbering that property.

The Civil Code remedies for Rent Skimming are only available to the lender, not tenants, and remedies are only available, as section 890(1) says, for rent skimming in the first year after the landlord obtains the property. No one has any rights against a landlord for taking rents and not paying the mortgage after the first year. As Mr. Gibbs also notes you may have rights and remedies if the landlord defrauded you into renting the property knowing he was going to let it go into foreclosure before you intended to move again, or for breach of the lease if he fails to return your deposit and last month's rent, or turn it over to the new owner on your behalf, once the foreclosure sale occurs. But generally as to the tenants a foreclosure is no different than if the property was just sold to a new landlord. In fact, under the federal statutes passed in the wake of the mortgage melt-down, tenants have more rights after foreclosure than they would have in many sales of the property. For example, if you are on a month-to-month rental, the new owner could kick you out on 30-days or 60-days notice depending on how long you had been there, if the property was sold. In a foreclosure, you have 90 days. So while a lender is clearly harmed by a landlord taking the rent and not paying the mortgage, it really is a situation of "no harm, no foul" as to the tenants, unless they were defrauded somehow.