Legal Question in Landlord & Tenant Law in California

Can I use security deposit in lieu of final rent payment? Foreclosure imminent on rental property.

My question involves a security deposit in the State of: California

I rent a single family home that was due to be foreclosed on April 1, 2010. I have just received notice within 48 hours prior to sale, that trustee has postponed this action 30 days while a loan modification is negotiated.

I know that CA Lease Agreement per C.A.R. includes terms that a security deposit may not be used in lieu of a last month's rent. However, our security deposit was transferred to landlord instead of being held in broker's trust account, so it is highly unlikely I would see this returned without filing some sort of legal action against landlord post-foreclosure.

There are reasonable rentals available in my area. I would like to give 30 days notice of my month-to-month lease without paying a final month's rent due to the fact my deposit will likely not be returned. Would this be possible?

Does notice of trustee sale provide for constructive notice of eviction?


Asked on 3/30/10, 12:48 pm

1 Answer from Attorneys
George Shers Law Offices of Georges H. Shers

As you are aware, the security deposit is not last month's rent and legally can not be used as such. Unless three was specific language to the contrary in the lease agreement, the secuirty deposit would automatically go to the landllord and there would be no reason for it to stay wtih the real estate entity that leased the property to yiou on behalf of the landlord. Since the foreclsing lender does not have to evict you, that the property is in foreclosure does not serve as a constructive eviction as you might not be evicted. You can give thirty days notice, but would have to pay the last month's rent at the first of the month. You need to work out with the landlord some method of insuring that you will get your security deposit back.

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Answered on 4/04/10, 11:33 pm


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