Legal Question in Real Estate Law in California

Re: foreclosure consequence for tenant

First, I would suspect there may be "rent skimming" occurring. There are two forms, and we could have either or both here: (1) an owner's failure to apply rent received to payment of the mortgage in the first year of ownership is one form; the other is receiving rent that belongs to someone else without authority to do so. Rent skimming and the penalties are described in the Civil Code (sections 890 to 894) and you can probably find the Code on line so you don't have to make a trip to the library. There may also be discussion of rent skimming searchable via Google.

If you can contact both the owner and the lessor, I'd do so, to request (or demand) an explanation in writing of their relationship, who is entitled to the rent, and what will be done to pay the taxes and cure the loan default. You probably won't get a satisfactory answer, but you should try and you should carefully note any responses you get for possible later use.

I would not recommend withholding rent - there is no free lunch - but you should also be aware of the rights of a tenant who is harmed by rent skimming set forth in Civil Code section 891(d).

You also have the "right of quiet enjoyment" of leased property. "Quiet enjoyment" doesn't refer to noise levels - it means you have the right not to be affected by conflicts over the right of possession or other landlord problems including conflicts over the right to receive rent or threat of foreclosure.

I'd say the long unpaid taxes are a very bad sign as to any possibility that the owner or borrower will be able to reinstate the defaulted loan, so a foreclosure sale is a strong possibility; the earliest possible sale is about 110 days after the Notice of Default, but as a practical matter it is likely to be more like 120-130 days. After a foreclosure sale, you'll be hearing from the buyer in a couple of days; probably via a three-day notice to quit, but there is a possibility that the buyer would prefer to keep you as a tenant and would be willing to negotiate a new lease.

In order to get 30 or so days after a foreclosure, you'd have to ignore the 3-day notice and when served with the inevitable unlawful detainer, you'd have to make some kind of a defense, which would force a trial date to be set, so you could get more time but at a cost in terms of hassle, conflict, legal fees and credit damage.