Question we received a few days ago. Posted from an email received, “My Landlord is in Foreclosure. I’m in Riverside, renting from a landlord that has not paid the mortgage nor the homeowners association fees and facing foreclosure, already in the first stages. My landlord told me this only after I learned of it from the homeowners association requesting I pay my share of rent to them not my landlord, who says she had not let me know for my own sake-because I could get the cash for key deal (I’m sure she mainly wanted rent paid to her as long as possible )
On phoning my housing worker in Indio I was told housing will not help or give advice on such things. HOWEVER, just yesterday, I found – On the Riverside Housing site-that as of two weeks ago a new law for those on housing, renting a home that is going into foreclosure gives – 90 days to move out after the foreclosure is completed. I’ve been looking for a new rental but not yet found one I want, and will need that time. The PROBLEM is although in DEC. my landlord told me within two months if they were going to land back on their feet. Last week, she said I would need to find a new place as the condo is going back to the bank. I have no idea when the foreclosure will take place or if it is in process right now. I need to know but do not know a date to use as a start point in counting off those 90 days. I do not know what the bank will do. How they will treat me. My landlord has not been forthcoming with info on any of this & I’m worried about not being told things I need to know. I don’t care about the cash for key deal half as much as I do about finding a new rental home.
I’ve been on edge since December. Do you have any answers or some advice or know where I can get some answers in full –please fill me in as soon as possible via e-mail or you can phone me. xxx-xxx-xxxx. I would really like to know what my options are when my landlord is in foreclosure.
Much thanks to you ahead of time and after,”
Thank you for the email. The situation you’re dealing with is very familiar and happening to thousands of people in California. This is also a situation that has no clear cut answers but I will give you the most common answers to the various questions that tenants have when the property they are living in is lost to a foreclosure.
A few days after the Trustee Sale (Foreclosure) occurs you will have someone knocking on your door inquiring about your status; who you are, names of occupants, etc. This person represents the lender that now owns the property you are occupying. If you are not home they will post a notice on your door asking you to contact them. This notice may be harsh and sound like an eviction notice but it is not, it is an initial attempt to impress upon you the seriousness of the situation and to make you aware that the property is now owned by a bank/lender and the purpose is to gather initial information. The new owner needs to know who you are and what your intentions are. For the most part they will want the property to be vacant as quickly as possible, exception is Fannie Mae who does have an option to some tenants to rent the property. Almost all other lenders are not willing to rent the property and they will assign the property to an eviction attorney to begin the eviction process.
Depending on how fast the eviction attorney begins the case you may get a 90 day notice to vacate in a week and maybe 2-3 weeks. New changes to tenant laws requires the new owner to give the tenant a 90 days’ notice to vacate and the legal proceeding to evict can’t begin until that time period has expired.
Cash for keys is an offer from the new owner, bank/lender, to induce you to move out and waive the 90 day period, the sooner you move out the more money the bank/lender is willing to offer you to help with your relocation costs. Typically if you will move out in say the first 30 days the bank/lender may be willing to pay you a fee of $3-4,000. If you move out within 60 days this amount is reduced substantially and if you move out in the last 90 days you probably will not be offered much money. Every bank is different. The purpose of offering you a relocation amount is to offset the cost to the bank/lender of having ownership along with the liability and expense of paying legal fees to have you evicted. Most bank/lenders will want to have the property vacant as quickly as possible so they can put on market and sell the property in a short a time as possible.
The reality is also that some tenants feel cheated but keep in mind that you may be in a situation where you haven’t paid rent in several months and if you take the full 90 days to move out then hopefully you will have saved a lot of money in rent that you did not pay. This should go a long way towards helping you with the cost of relocating.
One of your questions is about finding out the date of foreclosure; if you were to go to the local county recorder’s office and do a search for the address of the property you will be able to find the Notice of Default and the Notice of Sale. The Notice of Sale is the last document recorded which will give you a date when the property is scheduled to be sold in a Trustee Sale.
It sounds like you are a section 8 tenant so the best recommendation I can offer is for you to contact your case worker and let them know that you will be needing to move. Solicit their help in finding a replacement home and start looking. If you get lucky you may be able to find a replacement rental that will coincide with you being able to move quickly when the offer comes for Cash for Keys and that will allow you to deal with the inevitable task of moving while getting the most cash from the new owner of your rental.
Hope this helps if you still have questions please don’t hesitate to send me an email