Legal Question in Real Estate Law in California

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Legally the house is yours until it is sold at the foreclosure sale, so all rents up to that date are also yours. The tenant might want to hold back and be justified doing so the amount equal to any security deposits you have put up because a foreclosed upon landlord might not pay that sum back. What was it that yo told them? If you basically said they did not have to pay rent to anyone and could live in the house freely, then you may very well be stuck wilth not being able to collect any rent from them. If the understanding was that they could hold on to the rental amount until it was clear to whom it should be paid, then you need to send them a letter, supported by anything you can get from the lender agreeing, that it has now been decided that the rent should be paid to you until any successful foreclosure sale does occur. Point out that with the rent you might be able to make the mortgage payments so no default would occur.

Whether or not the lease has now converted into a month to month tenancy is unclear. But you can definitely give them a thirty day notice that you are not agreeing to renew the tenancy; you may be able to give them a three day notice for failure to pay rent but that I am uncertain about.

You could do as any other landlord and properly pursue eviction proceedings to get a judgment for the unpaid rent, and regain possession so you can re-rent the property, as is your right until actual foreclosure.

I would only add one small technical observation. Your deed of trust is probably captioned "Deed of Trust and Assignment of Rents." You will probably find some language in it saying that if you are in default, you lose the right to collect and keep rents from the property, and such rights belong to the lender, at least so long as you are in default. I don't think lenders enforce this provision very often, but undoubtedly they have the right to do so if they think it is worth their while.

Actually you don't lose the right to collect the rents. The lender has the right to collect them instead, if they choose to do so. Unless they exercise that right, you are free to collect the rents, evict tenants who don't pay, etc., just as if you are not in default.