Foreclosure or Sale of Rental Prperty

Foreclosure of Rental Property
If you are living in a rental unit and the owner/landlord loses the property in foreclosure, the new owners must, by law, provide at least 60 days’ notice to the tenants to move out before an unlawful detainer action can be started. This is true whether the foreclosed property is owned by the bank or has been purchased at a foreclosure auction. Note that this law applies to tenants living in a foreclosed rental unit; if your own home is foreclosed, you can be forced to move immediately.

The new owners of the foreclosed dwelling effectively become the new landlords. You may be able to work out a new lease agreement with the owners. If you continue to pay rent, you should pay the new owners and not the former landlord or rental company. Even if you do not continue to pay rent, the new owners cannot evict you for 60 days. Whether or not you still owe rent to the owners is questionable if you have not signed a new lease agreement. While the new owners cannot evict you for 60 days even if you pay no rent to them, though they may be able to sue you in small claims or superior court for the unpaid rent or for the cost of any damage or expense from your continued residence in the foreclosed unit.

Sale of the Rental Property
If you are living in a rental unit when the property is sold to a new owner, the new owner becomes your landlord and the lease agreement transfers to the new owners with the property. All the rights and responsibilities you had as a tenant before the sale still apply.


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