Legal Question in Real Estate Law in California

Re: Pending Foreclosure Sale & Tenant Rights

Yes. Yes.

That being said, the "bank" may be proceeding without the right to proceed. Many do. The question is not just, "have I paid the mortgage", but by what right does the party foreclosing claim the right to do so. Many, many don't. Have your friend check out www.U1stForeclosureRelief.com. It is my client. If he wants to contact them for further information and assistance tell him to use my name, Mitchell Roth, as the referral.

Good luck, and good work.

Re: Pending Foreclosure Sale & Tenant Rights

Your friend should consult a bankruptcy attorney about the possibility that a Chapter 13 filing could stop the foreclosure.

Re: Pending Foreclosure Sale & Tenant Rights

Assuming the foreclosure is by trustee sale under a power of sale in a deed of trust, the purchaser at the foreclosure sale has the right of immediate possession as soon as he, she or it receives the trustee's deed, which is usually immediately.

The purchaser can then evict anyone in possession of the property - the former owner and/or the former owner's tenant - by means of an unlawful detainer action. Only three days notice is required to either of them, NOT thirty days! (The only exception is that a lease that was senior in time of creation to the obligation being foreclosed is not extinguished by the foreclosure - but since this is a month-to-month rental, it is obviously not senior to the foreclosed note.)

As a practical matter, most unlawful detainer actions will take about 30 days to complete, from the giving of notice through arrival of the sheriff, so in a sense the tenant and the owner can probably figure on it being about 30 days from the date of sale to the day they are thrown out.

However, I don't recommend too much foot-dragging on departure after a foreclosure, because the new owner will be entitled to rents, damages etc. in addition to possession.

I might add that if the buyer at foreclosure is a third party, it will have an easier time pleading and proving a UD action than if the foreclosing lender is the buyer, as often happens. A foreclosing lender attempting to get possession through a UD action may have to prove that it had the right to foreclose and that the sale was regular in all respects.

On the other hand, the property does not have to be vacated prior to the auction. The friend and the tenant lose their rights just after the sale, upon delivery of the trustee's deed to the winning bidder.

Another thing to keep in mind is that the buyer at foreclosure may not want to move in. Once your friend knows who the buyer is, he or she can always inquire about becoming a tenant of the new owner, at least for long enough to get re-situated without provoking a UD lawsuit.