Legal Question in Real Estate Law in California

Re: tenants in home going into foreclosure

You can always bid at the sale, as one of my colleagues pointed out the other day. Someone posted this exact same question. If this was you, disregard.

You have no right to stay in, unless the foreclosing beneficiary wants you to pay rent to them, which they may want. If this is a bank, they will want the money from rent, and once the foreclosure sale takes place, you should contact them, if your bid is not successful.

Very truly yours,

Re: tenants in home going into foreclosure

Unlike a voluntary sale, where the buyer takes "subject to" the leasehold rights of tenants, a buyer at foreclosure can evict tenants whose leases are "junior" in time to the obligation being foreclosed.

Often, the buyer at foreclosure will be the lender itself, or a speculator who doesn't intend to occupy the house and wouldn't mind having a good tenant in place. Although the buyer might be willing to assume the old lease, it would be cleaner to have a new lease, even if it is on the same terms as the old one, since the validity of the old lease will be in doubt as a result of the foreclosure as well as the possible fraud of the current owner/landlord.

You can certainly bid on the house yourselves, but note that the selling trustee will only accept "cash" or its near equivalent (cashier's check, letter of credit, etc.) except that the foreclosing lender can "pay" with what it is owed, giving it a large advantage in the bidding.

If the buyer at foreclosure decides for whatever reason that it wants you out of the house, it will give you a three-day notice, after which it can file an unlawful detainer suit, and if and when it wins, it will get a writ of possession and the sheriff will shortly be by to carry it out by carrying you out. This process does indeed take about 30 days, more or less, but there is no specific number of days written into any law; it depends upon the court's calendar and the diligence of the new owner or its attorneys.

I think you have a good case against your landlord for fraud, and perhaps you should consider suit in Small Claims Court (for up to $7,500). Not so sure about the rental manager, but a suit should name both as defendants.

Your facts suggest that the landlord may have committed a crime called "rent skimming" in the first year he owned the property - see the definition in Civil Code section 890 and also sections 891 to 894 re penalties. I don't know if this is of any help to you, though.

My answer is based on general state-wide law, and San Diego might have a rent-control ordinance that would be more helpful to a renter in this situation.