Monday, October 18, 2010

Tenants Have Rights Even After Foreclosure

Tenants renting houses, condominiums or apartments that have been sold at foreclosure are often caught by surprise when they learn that the landlord has lost the property. Many times the landlord or leasing company keeps tenants in the dark as long as possible and tenants may not even be aware of the foreclosure until after the property has already been sold. Even though these circumstances may be a surprise and a hardship, tenants do have rights in this situation and should not be afraid to assert them. These rights will not allow you to stay in the property for the long term, however, they are designed to allow tenants enough time to move from the residence with a sense of order instead of an abrupt dislocation.

After a property has been sold at a foreclosure, the new owner must give those who live at the property notice that the property has been sold and that their lease interests have been terminated. Under Federal law, this notice must give the tenants living in a foreclosed property at least 90 days to vacate. If the tenant has a fixed term lease which extends longer than 90 days, then under certain circumstances, that tenant can remain in possession for the full term of the lease provided that he or she continues to pay rent to the new owner. If the lease is not for a fixed term, or if the term of the lease will expire before the end of 90 days, then the tenant does not have to pay rent to the new owner during the 90 day period to vacate. If a tenant remains living in a foreclosed property beyond 90 days after receiving notice to vacate the property, then the new owner may proceed to court and file an unlawful detainer to evict the tenants.

Unlike a tenant living in a foreclosed property, the former owner must vacate the house or condominium within 3 days. Most notices that are posted on properties after foreclosure include a reference to the 90 days that a tenant can remain in possession, but often emphasize that owners must leave within 3 days. Some also make it sound as though many tenants will not qualify for the 90 day period. The reason for this is that the people who manage the property for the buyer at foreclosure, usually real estate brokers, want to get the occupants out of the house as quickly and inexpensively as possible. Many times these agents will show up at the house and offer cash for keys if you are a “bona fide tenant.” They will often ask to see rental agreements or other proof that someone is actually residing in the property as a tenant. A tenant is under no obligation to disclose any information about whether he or she is a tenant, and many times the person offering to discuss your bona fides as a tenant will tell you whatever they think is likely to make you want to move.

The truth is that it is not a difficult standard under the law to show that you are a bona fide tenant. All that is required is that you have lived at the property since before it was sold at foreclosure, that you paid a reasonable amount of rent, and that you not be related to the former owner. Even if you are behind on the rent, or you don't have a written rental agreement, if you are a tenant that meets the qualifications mentioned above, then you have a right to remain in possession for 90 days after receiving notice of the foreclosure sale.

Many of the owners that buy properties at foreclosure simply choose to go ahead and file an unlawful detainer action to evict the occupants at the property by suing the former owner and Does, or unknown occupants. The reason that they do this is because it forces the tenants living at the property to file a response in court if they want to take advantage of the 90 day period to remain in possession. The Plaintiff must give a copy of the summons and complaint to the people living in the house. Witihin this packet there will be a document entitled Prejudgment Claim of Right to Possession. If a tenant residing at the property receives such a complaint before the expiration of 90 days notice, then he or she needs to go to court and complete and file this Claim form. If the court does not receive any Claim of Right to Possession from a tenant at the property within 10 days that the complaint is served, then the Plaintiff seeking to evict can asks for a default judgment to be entered against the former owner and all unknown occupants. The court will usually grant the default judgment and issue a writ for the Sheriff to evict all occupants. This can happen in just a matter of a couple weeks.

If you are a tenant living in a property that was recently foreclosed and you receive a summons and complaint which names the former owner of the property as the defendant, then it is very important that you contact an attorney that handles unlawful detainers or your local legal aid society.

For more information on another blog devoted to this subject check out

If you or someone you know someone living in a place that may be affected by foreclosure, please tell them they do have rights. They should try to speak with a lawyer if possible. If they qualify for the free services provided by the Legal Aid Society, they can call 877-534-2524 for help. Help in filling out legal forms is available at clinics in the Courthouses.

The following information applies to residents of foreclosed homes within San Diego County:

For South County residents, Unlawful Detainer Clinic is held Monday through Friday from 9AM to 12:30 at the Southbay Courthouse, 500 West Third Avenue, 1st Floor, Room 155, Chula Vista, California.

  • For East County residents, Unlawful Detainer Clinic is held Mondays, Wednesdays, Fridays from 8:30AM to 12 noon and Tuesdays and Thursdays from 9:30AM to 12 noon at the East County Courthouse, 250 East Main Street, 1st Floor next to Department 1, El Cajon, California. 
  • For Central residents, Unlawful Detainer Clinic is held Monday through Friday from 1PM to 3PM and Tuesdays and Thursdays from 9AM to 12 noon at the Hall of Justice, 330 West Broadway, 2nd Floor, Civil Business Filing Office, San Diego, California, 92101. 
  • For North County residents, Unlawful Detainer Clinic is held Mondays and Thursdays from 12 noon to 3PM in Department 35-Annex at the North County Courthouse, 325 South Melrose Drive, Vista, California 92081. Spanish-speakers must bring a translator. 

For more information regarding attorneys that represent tenants, visit us at

This article is for informational purposes only and does not constitute legal advice since it does not apply to any particular case, situation, or set of facts.

1 comment:

  1. I had a short sale last year and my Realtor recommend for a home loan. I am very happy to be able to purchase again.
    CFS Mortgage assists homeowners who have recently been through a foreclosure, short sale or have recently emerged from bankruptcy.