Legal Question in Real Estate Law in California

Under federal renter protection statutes passed in response to the real estate melt-down, you have 90-days to stay in the house, or more if you have a lease that will not run out for more than 90 days. You must, however, "attorn" to the new legal owner. That means you must treat the new owner as if they are a continuation of the old landlord, particularly you must pay rent just as if the foreclosure had never happened, but to the new owner. If you have failed to pay rent, they are entitled to give you a 3-day notice to pay rent or quit just like any landlord. I should also warn you, however, that the right of redemption expires 5 days before the foreclosure sale. So your landlord had no legal right to redeem at that point, and that means I am not at all sure that rescission is going to be possible at all, much less done in 30 days. If the redemption period had expired and the sale was done in accordance with the law, the investor may well be able to make it stick.

I agree with Mr. McCormick.

There are two issues here. The first concerns your landlord. If he put the check in the mail the day before the trustee's sale, and the lender received the funds after the sale, the sale was proper. The lender must receive and accept the reinstatement amount, prior to the sale. An excellent discussion of the problem is in Nguyen v. Calhoun (6th Dist. 2003) 105 Cal.App.4th 428. (http://scholar.google.com/scholar_case?case=9434496937349507160&hl=en&as_sdt=2&as_vis=1&oi=scholarr)

Mr. McCormick aptly points out that the right to reinstate expires 5 days prior to the sale. That is correct. I also doubt your landlord would be able to set aside the sale, because it appears that title has been transferred to a bona fide purchaser. Civil Code section 2924 provides that a trustee may prepare a trustee's deed upon sale, containing recitals that all of the procedures for foreclosure have been complied with. These recitals create a presumption, that is conclusive if delivered to a bona fide purchaser at the trustee's sale.

The issue that concerns you right now is the second issue. You can read the Protectig Tenants at Foreclosure Act here: http://www.nlihc.org/doc/701-704-Public-Law-111-22.pdf

The person who purchased the property is your new landlord, until a court rules otherwise or the sale is actually rescinded. Your new landlord is subject to this act.

I agree with both preceding answers, which are well-reasoned and well-stated. I can only add two perhaps minor observations: First, you mention receiving a "summons" requiring you to vacate within three days. Is it really a summons, i.e., is there an unlawful detainer or some other kind of legal proceeding against you, or do you mean a three-day notice? The answers given assume you meant "notice," not "summons." If you've been sued, your response should probably be different, e.g., to file and serve an answer.

The other observation is that investors who buy foreclosures often are willing to retain the existing tenants, if the rent is adequate and the tenants are paying on time. Investors are not buying properties for their own use, nor do they want to have them empty or to look for new tenants if they don't have to. So, maybe you should try to get in touch with the investor and see if you can strike a deal, or at least to let him know that you are aware of the PTFA. This is less lilely to be a good maneuver if you are behind on the rent.

I would point out one item overlooked by the above answers. Although the former owner only has up to the fifth day before sale to redeem the property, the lender can at any time agree to not foreclose and not remove title from the "former" owner. So the lender may have been negligent in letting the foreclosure sale go forward. If the buyer had no knowledge of the redemption agreement happening, then he probably would be a bfp. So the outcome might be that the new owner keeps title to the property, the old owner successfully sues the lender for letting the sale go through.

You need to keep in close touch and have good relations with both owners.