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Ask the County Law Librarian – Foreclosure notice for prospective tenants

Sacramento County Public Law Library

Q: I recently signed a two-year lease on a house in Sacramento. Shortly after I moved in, I received a notice that the property was going to be sold at a foreclosure sale. It turns out the owner knew he was about to lose the house in a foreclosure when he signed a lease with me. Do I have any rights in this situation? Obviously if I’d known I might have to move again so soon, I wouldn’t have signed the lease.

– Devin

A: Unfortunately, your landlord’s actions put you in a precarious situation. You don’t know if the house will be sold, when it will be sold, and who will be the purchaser. This means you don’t know if you’ll have to move soon, or if you can stay in the house for at least the remaining term of your lease.

It’s possible you won’t have to move; if the new owner does not plan to live in the house, you will be able to remain in the house for the rest of your lease. If the new owner wishes to live in the house, though, your lease can be terminated with 90 days’ notice.  Take a look at my prior column for information about your rights as a tenant in a foreclosed property.

This type of situation happens often enough that California enacted Civil Code 2924.85, which requires owners of single-family homes, or buildings with 4 units or less, who have received an un-rescinded Notice of Default to provide prospective tenants with written notification of the pending foreclosure before a lease or monthly rental agreement is signed.  The written notice must inform the potential tenant that the foreclosure process has begun on the property, and the possible implications this may have on the tenant.

Under this law, tenants who are not given this notice are entitled to void their lease, and to recover either one month’s rent or twice the actual damages, whichever is greater, as well as the return of any prepaid rent.  If you choose not to terminate your lease, and the foreclosure has not yet occurred, you can deduct a total amount equal to one month’s rent from future rent obligations owed to the landlord.

More information about this law is available from Nolo Press at http://www.nolo.com/legal-encyclopedia/california-landlords-must-notify-prospective-tenants-foreclosure.html.

Do you have a question for the County Law Librarian? Just email sacpress@saclaw.org. If your question is selected your answer will appear in next Thursday’s column. Even if your question isn’t selected, though, I will still respond within two weeks.

Coral Henning, Director
@coralh & @saclawlibrarian
www.saclaw.org

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