Evicting a tenant in San Diego after a foreclosure used to be a fairly straightforward process in San Diego, California. Recent laws, however, have made it relatively complicated and a San Diego Landlord Eviction Attorney is recommended. The only thing that remains simple and clear is that if it is the previous owner that is occupying the San Diego Foreclosure, you need only give a 3 day notice to quit before filing an unlawful detainer.
The first law we have to look at is the Protecting Tenants at Foreclosure Act of 2009. This law was signed by President Obama in May of 2009. This law basically says that a buyer of a property at foreclosure takes the property subject to the lease of the current tenant and that the new owner has to honor that lease. It also says that if there is no lease, then the buyer of the foreclosure must give the tenants 90 days notice to quit (move out) of the property before the new owner can file an unlawful detainer to start the eviction process.
Seems straightforward right? Wrong! First, how do you know if the tenant has a lease? We handle a lot of these evictions after foreclosures and the tenants rarely are willing to give up a copy of the lease. So do you just assume 90 days? Well the problem with that is that if you go to Court after the 90 days and the tenant shows up and presents a lease to the Court showing that have a lease that lasts another 6 months, then you are out your attorneys fees and court costs and may even have to pay the tenants costs and attorneys fees!
Another problem with the law is that since the lease is still in existence, the tenant has to pay rent. Well, of course the tenants do not want to tell the San Diego Landlord that just bought the foreclosure how much the monthly rent is. This makes it difficult to serve a 3 day notice to pay or quit if they do not pay some rent because you do not know how much to put that they have to pay in the notice. And if you put too much and the tenant shows a lease at Court – you lose again!
So as you can see, the new law probably did more too muddy the waters concerning San Diego Evictions after Foreclosure than anything.
Here is something else people purchasing foreclosures need to know. The Protecting Tenants at Foreclosure Act of 2009 only applies in certain situations. First, it must be a bona fide lease or tenancy. What does that mean? Well the new law says it means:
- the mortgagor or the child, spouse, or parent of the mortgagor under the contract is not the tenant;
- the lease or tenancy was the result of an arms-length transaction; and
- the lease or tenancy requires the receipt of rent that is not substantially less than fair market rent for the property or the unit’s rent is reduced or subsidized due to a Federal, State, or local subsidy.
Again, this seems fairly straightforward. It is when it is not a bona fide lease that it gets really complicated. Let me give you 2 examples that our San Diego Landlord Eviction Attorneys recently dealt with.
1. The tenant in the unit was the son of the former owner and had a lease and paid rent. Ok, so that means they do not meet criteria number 1 above. So now what? We apply state law. Well first, we have to realize that they are not the previous owner (but the previous owner did not live there) so we cannot just give them a 3 day notice to quit. How about S.B. 1137 signed by the California Governor in 2007? This extended the old notice period from 30 days to 60 days after foreclosure. Except that S.B. 1137 excluded properties where the former owner also lived there. Ok so not 60 days. This means in this case, it defaulted back to the law that requires 30 days notice. And since Protecting Tenants at Foreclosure Act of 2009 did not apply, the son did not have to pay any rent to the new owner.
2. In Example 2 we had the employee of the former owner living there and paying about half of the market value for rent for the property. So again, Obama’s Protecting Tenants at Foreclosure Act of 2009 did not apply. Also, not the former owner so cannot just give 3 days notice. In this case S.B. 1137 did apply because the former owner was not living there. And again because Protecting Tenants at Foreclosure Act of 2009 did not apply, this San Diego tenant did not have to pay the new San Diego Landlord any rent!
As you can see how a purchaser of a foreclosure in San Diego deals with tenants from the previous owner is complicated and it is very easy to make a mistake.
Landlords also need to be wary of getting rid of a tenant after purchasing a home at a foreclosure auction. The laws are currently in favor of the tenant being able to stay, delay the eviction process, make your life miserable. While many San Diego investors that purchase foreclosures think they can handle evictions themselves, the laws are complicated and need to be followed to the letter. If you do not, you might have to start over and pay the tenants costs!.
The Attorneys at the Law Office of Harold D. Thompson are San Diego Eviction and Unlawful Detainer Lawyers dedicated to helping with all of your Landlord Tenant issues. Call us TODAY at 619.615.0767 or visit our Best San Diego Eviction Website for more valuable eviction information.
