The threat of foreclosure can be especially confusing if you're the tenant of a foreclosed property. At no fault of your own, you can find yourself at the center of a complicated and scary set of events. Fortunately, there are protections in place for all of California, and if you happen to live in the city of Los Angeles, you may have even more extensive rights.
Anywhere in California, you, as a renting tenant, cannot be evicted right away simply because the property has been foreclosed upon. If you are renting month-to-month, you have a full 90 days from the time the new owner gives you notice to vacate before you are obligated to do so. If you have a written lease agreement, you cannot be evicted until your current lease ends.
When you first find out that your current land owner is being foreclosed upon, it's important to prepare. The property may pass through the hands of several owners quickly, from the bank to the final buyer. You do owe rent to whoever the actual owner is at any given time. If nobody comes to collect rent, make sure that you set aside the normal rent amount, as it is still something that must be paid. On the other hand, if someone does collect, either in person or by phone or mail, you need to ensure that the party you are paying is the legitimate owner of the property. Scammers will find recently foreclosed rental properties, and represent themselves as the new owners, collecting rent from unsuspecting tenants who are simply trying to fulfill their obligations in good faith.
In Los Angeles, foreclosure is not a just cause for eviction. New owners are obligated to allow the tenants of an acquired property to continue renting at their existing rate. Keep in mind that if you violate the terms of your renter's agreement, or do not pay rent on time, you can still be evicted.
In part two, we'll talk about buyouts and "cash for keys" arrangements. Such offers are not always the great opportunities they seem to be.