Saturday, February 2, 2013

New California Law Requires Landlords to Inform Prospective Tenants About Foreclosure

New California law requires landlords to provide disclosure to prospective tenants, prior to execution of a lease, if a notice of default (NOD) has been recorded against the property.  (applies only to rentals of single-family homes and apartments in buildings of no more than four units).

tenant protections in foreclosures

CA Senate Bill was approved by the Governor September 25, 2012 - and enacted as Civil Code Section 2924.85 - became effective January 1, 2013.

CA real estate law The required disclosure must be provided in writing and must state: 

"The foreclosure process has begun on this property, and this property may be sold at foreclosure. If you rent this property, and a foreclosure sale occurs, the sale may affect your right to continue to live in this property in the future. Your tenancy may continue after the sale.  The new owner must honor the lease unless the new owner will occupy the property as a primary residence, or in other limited circumstances. Also, in some cases and in some cities with a ‘just cause for eviction’ law, you may not have to move at all. In order for the new owner to evict you, the new owner must provide you with at least 90 days’ written eviction notice in most cases."

This law also says that violation of this disclosure requirement "shall void the lease at the election of the tenant and shall entitle the tenant to recovery of one month’s rent or twice the actual damages, whichever is greater, and all prepaid rent from the landlord…"  If the tenant elects not to terminate the lease, and foreclosure has not yet occurred, "the tenant may elect to deduct a total amount equal to one month’s rent from future rent obligations owed the landlord…"

A new disclosure form for this will be provided by the California Association of Realtors.

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Posted via email from Explore OC Homes

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