Legal Question in Real Estate Law in California

Re: renting a foreclosure

Your rights depend upon several factors. First, are you month-to-month or in a lease which will run beyond the likely foreclosure date? If the former, since the current owner would have the right to terminate the rental on relatively short notice anyway, you probably have no remedies.

Next question is whether the foreclosure was foreseeable at the time the rental was negotiated. It is probably fraud to fail to warn a prospective tenant of the likelihood of foreclosure.

I would also suggest looking into whether the landlord is guilty of rent skimming. This is using revenue from rental of residential real property during the first year after acquiring it without first applying the revenue or an equivalent amount to the payments due on all mortgages and deeds of trust encumbering the property. See Civil Code section 890(a). Tenants affected by a foreclosure where there has been rent skimming have rights under Civil Code section 891(d).

Yes, you still have to pay rent - and probably to the landlord unless and until you get a notice from the lender that it has invoked its right to receive the rents under an assignment, or until the foreclosure sale takes place, thus terminating the erstwhile owner's rights (as well as yours) to the property. As a practical matter, as a sale draws near you might want to set the rent money aside as an assurance that you recollect your deposit. Yes, the owner can evict you - but who will be the owner and when will ownership change?

How long you can stay is also hard to forecast in terms of days. Technically, you have very limited rights to be on the property from the moment of sale, but a proper eviction requires notice and if you don't leave voluntarily, an unlawful detainer action and writ of possession. Some lenders and third-party buyers at foreclosure will consider giving the current occupant a new lease. This is one reason I favor staying fairly current on the rent; you want to look like a responsible tenant.

As a guess, I'd say figure around four or five months from the time a Notice of Default is recorded until the sheriff tosses you out; it could be a bit shorter or a lot longer.