Legal Question in Real Estate Law in California

Re: Foreclosure of Property I'm Renting

Throughout this answer I assume a foreclosure by trustee's sale resulting from default on a note secured by a deed of trust. The other kind of foreclosure is judicial foreclosure. It's a lot less common in California, and the process is different in some important ways.

In a foreclosure, certain parties must be notified and others may obtain notification by preparing and recording with the county recorder a formal document known as a Request for Notice of Default (RND).

In some cases, tenants are entitled to receive the Notice of Default automatically, without filing an RND. Whether you qualify is a highly technical question that cannot be assessed here, but generally tenants with formal long-term leases that have been recorded would be entitled to notice, and tenants with oral leases would not.

Your rights upon a foreclosure sale depend upon whether your interest in the property is prior to that of the secured none-holder. In general, that means if the loan being foreclosed predates your tenancy, a buyer in foreclosure can have you evicted, but if your lease predates the loan, the buyer takes the property 'subject to' the lease and you in effect become the buyer's tenant, who must accord you all the rights set forth in your lease.

You can learn a lot about the priority of the loan and what's going on by reviewing the filings at the courthouse and recorder's office. If you are unsure what to look for or what the documents you find mean, see a local real estate professional, title company, or real estate attorney.

Even if a buyer at foreclosure has the right to evict you because the trust deed he foreclosed on was prior to your lease, that doesn't mean he will. The buyer may be pleased to have a tenant. Further, if the buyer wants you as a tenant, he has the right to enforce the balance of the lease and to collect rent from you, unless by some wild chance your lease has something in it that makes your obligation terminable upon sale. This would be very unusual.

Foreclosures take about four months from Notice of Default to sale. It can be longer if there is negotiation to cure the default or if the procedural pipelines are clogged.

Re: Foreclosure of Property I'm Renting

This is beyond the scope of my expertise and therefore I cannot provide you with an answer.