FORECLOSURES EXPLAINED WITH HELP RESOURCES

By Gary Link, Attorney at Law – specialist in Landlord-Tenant Law

Renters are being displaced because of foreclosures. Tenants have lots of questions occupying a foreclosed home.

Question: My landlord received a notice of default. It was posted on the front door. How does this affect my occupancy?Answer: A notice of default is the first notice in the foreclosure process. Homeowners have three months from the date of the notice is filed with the recorder’s office to cure the defaultDuring this time, the homeowners still hold title to the property and are entitled to collect rent from the tenants. If tenant holds a lease the homeowner may not terminate the fixed-term lease without cause.

Question: My landlord is in default on his loan I have not been able to contact him to pay my rent. What should I do?Answer: The tenant is obligated o pay the rent. If the tenant can’t contact the homeowner to pay the rent the money should be set aside or perhaps put into an escrow account. Failure to pay the rent could lead to the homeowner filing an eviction against the tenant. If the tenant has an escrow with all unpaid rent then it can be used if service with a 3-day notice to pay or quit.

Question: I paid my landlord a security deposit when I moved in but my landlord has since lost the property through foreclosure. Who is responsible for my deposit?Answer: When the homeowner loses title to the property, the homeowner must either return the security deposit to the tenant or transfer the deposit to the new owner, which could be a bank. It[s the new owner’s responsibility to obtain the initial deposit from the previous homeowner. If the deposits not returned, the tenant can sue both the previous homeowner and the new owner jointly, as both parties are legally responsible for the deposit return to the tenant.

Question: A Notice of Trustee’s sale and a Tree day notice to quit was posted on the front door and addressed to my landlord. How does this affect my occupancy?Answer The law entitles the homeowner only three days to vacate the property. The new owner must give proper notice to any remaining tenants in position. After foreclosure, tenants are entitled to a 30 day written notice, regardless of the length of the tenancy and usually the lese is extinguished. If tenant fail to vacate at the end of the 30 days then the bank or new owner many file an eviction action.

FINDING HELP

Neighborworks Homeownership Center 916 452-5356

Neighborworks America and Home Ownership Preservation 888-995-4673

Home Loan Consoling Center of Sacramento 916-646-2005

By Design Financial Solutions Sacramento 800-7502227

Sacramento Mutual Housing Association916 453-8400 ext 43 Bi-lingual counselors