Broadcast 6/26/09 – It’s Your Call, KVCR’s call-in talk show, had guests from organizations that fight for the rights of tenants who find themselves on notice that their rental unit is being foreclosed upon.

One-third of foreclosures nationwide have renters at the time of bank repossession. Both single-family homes and multi-unit properties are being foreclosed, and in many instances it’s the owner’s investment property that is the first to go when the owner is struggling financially. This leaves renters in a precarious situation. These issues were discussed by our guests Enrique Acuna, attorney for the Inland Empire Latino Lawyers Association, Alan Sims, CEO For the Center for Litigation and Consumer Real Estate Education, and Eulalio Castellanos, attorney for the Inland Counties Legal Services. Both are non-profit organizations that provide legal assistance for those who cannot afford their own lawyer.

Watch host Roger Bowman ask questions and take caller questions for these three guests.

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How do I know if my building is being foreclosed on?

The bank is required to give notice of the foreclosure within 20 days of the foreclosure sale. This notice is required to be posted on the building that is the subject of the foreclosure. Foreclosure sales are also posted on line at www.foreclosurelistings.com

If the building I live in has received a notice of foreclosure sale, does this mean that the bank has the right to evict me?

In most cases, your existing lease will be terminated by the foreclosure sale, and the new owner can begin the process of eviction by giving you a 30 day notice to vacate. However, there are some exceptions discussed below.

In what situations am I protected against eviction?

1) You entered into your lease before the current mortgage was recorded:

The first exception applies if you entered into a lease before the mortgage that is the subject of the current foreclosure was finalized. This can occur:
 
If you entered into a lease with a prior owner of the property (e.g. the owner you entered into the lease with is NOT the owner that holds the current mortgage that is the subject of the foreclosure)
 
OR
 
the owner you entered into a lease with refinanced (took out a loan on the property) the property after you entered into a lease, which resulted in foreclosure.

In such cases all of the below may apply,

a) The new owner may have to honor the lease or work out an arrangement with you.
 
b) You are responsible to the new owner for rent from the date of sale.
 
c) In some cases you may have to pay rent again and then attempt to recover the overpayment from the previous owner.

2) You live in a unit that is a part of a Federal Housing Program

Foreclosure does not automatically terminate a tenancy where a federal housing program requires that the landlord have good cause to terminate.

Section 8: During a tenant’s initial term on Section 8, good cause is required to terminate a tenancy. Good cause also may be required for tenants that have been on Section 8 for more than one year.

3) You live in a rent controlled unit

Local rent stabilization ordinances can protect a tenant in a controlled unit from eviction. In short, foreclosure may not be a proper ground for eviction in some jurisdictions that have rent control.

If you live in a rent-controlled unit in:
Los Angeles = foreclosure IS NOT a basis for eviction. If you don’t know if you are in a rent controlled unit in LA call (866) 557-7368
Santa Monica = foreclosure IS NOT a basis for eviction. If you don’t know if you are in a rent controlled unit in SM call (310) 458-8751
Beverly Hills = foreclosure MAY NOT BE a basis for eviction depending on the nature of the unit you are in. If you don’t know if you are in a protected rent controlled unit in BH call (310) 285-1119
West Hollywood = foreclosure MAY NOT BE a basis for eviction depending on the nature of the unit you are in. If you don’t know if you are in a protected rent controlled unit in WH call (323) 848-6450

What other rights do I have?

Unless the new owner goes through a formal eviction process, the owner cannot: turn off your utilities, change the locks to your unit, or put you out onto the street.

What about my security deposit?

Foreclosure usually does not forgive the previous owner for any security deposits

You can sue the previous owner, and in some cases the new owner, for damages — so long as the landlord did not declare bankruptcy.

The California-wide organization, Tenants Together, advocates for tenant rights and has met with KVCR to discuss this growing problem. They have a Los Angeles chapter that helps people in the greater SoCal area.

Another organization, the Inland Empire Latino Lawyers Association, helps the Spanish-speaking community in San Bernardino and Riverside counties negotiate with the banks to allow the tenant occupants to retain their lease throughout the bank repossession process. This segment of our community often finds it difficult to negotiate with banks who, in some cases, would be happy to have the tenant income.

Look for a forthcoming post with links and contact information for these associations.