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I. IINTRO - ALPHABET SOUP OF TENANCY NOTICES

For many years, there were only two kinds of notices used to terminate a residential tenancy - 3 Day Notices and 30 Day Notices. Now, with foreclosures at an all time high and property values at an all time low, Congress and the State of California have enacted new "Notice" laws, to protect residential tenants, who, in the past, would have been ousted from their homes and searching for a new home in a relatively short period of time. The new rules provide that a foreclosing lender or immediate successor in interest at Foreclosure must give the following notices to terminate a tenancy. Local ordinances must be reviewed before determining what type of notice is appropriate as some areas may impose more restrictive requirements than the ones described in this article. Some cities have passed specific rules regarding the termination of a tenancy after foreclosure.

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II. TERMINATING a MONTH-to-MONTH TENANCY BY FORECLOSING LENDER OR PURCHASER (successor-in-interest) AT A FORECLOSURE/TRUSTEE's SALE

3 Day Notice - Borrower is Tenant: If the tenant or occupant of the residential property is the borrower, then the lender can serve a Three Day Notice to Quit to terminate a tenancy. A three day notice is also sufficient for a tenant who is a party to the mortgage note. {Cal. Civ. Proc. Code A?A? 1161(a), 1161(b)}.

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A. 60 Day Notice - Borrower is not Occupant; Family Members are Tenants:

If a tenant or occupant is the child, parent, or spouse of the borrower and the borrower is not an occupant of the property, then the lender must serve a 60 Day Notice to Quit prior to initiating the eviction process

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B. 60 Day Notice - Non-Family Members are Tenants - Lease is Not "Arm's Length":

For a tenancy that is not the result of an arm's-length transaction or if the rent is substantially lower than fair market (FMV) rent, the lender must serve a 60 Day Notice to Quit to terminate the tenancy. An "arm's length transaction" means that the transaction is at market rent and terms. For example, if Dad allows his son rent for $2,000. when the FMV rent is $4,000., that is not an arm's length transaction because the son in a sense is receiving a gift from Dad as Dad is giving son less than what the FMV rent would be for an "outsider" (market rate). {Cal. Civ. Proc. Code A?1161(b)}.

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C. 90 Day Notice - Non-Family Members are Tenants; Lease is "Arm's Length":

If the tenant is (1) not the borrower, or is not a child, parent, or spouse of the borrower, (2) on a periodic tenancy and (3) in a tenancy that is the result of an arm's-length transaction and/or the rent is not substantially lower than the FMV - then the tenant is entitled to a 90-Day Notice to Terminate the tenancy. A "periodic tenancy" is a tenancy arrangement that continues on a week-to-week or month-to-month basis with no clear termination date fixed. This sometimes occurs when a tenant continues to occupy (or holdover) a dwelling after the end of a lease. Non-Family Member; Lease Not at "Arm's Length: For a tenancy that is not the result of an arm's-length transaction or if the rent is substantially lower than fair market (FMV) rent, the lender must serve a 60 Day Notice to Quit to terminate the tenancy. {Cal. Civ. Proc. Code A?1161(b)}

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D. Full Lease Term - Non-Family Member; Lease is Arm's Length:

If the tenant is (1) not the borrower, or is not a child, parent, or spouse of the borrower, (2) on a lease, (3) in a tenancy that is the result of an arm's length transaction and/or the rent is not substantially lower that the FMV, - then the tenant is allowed to occupy the property until the end of the lease term. For example, if the tenant has a two year lease, and the lender forecloses on the owner three months after the lease commences, the tenant is allowed to remain in possession until the end of the term (two years). The tenant, however, must continue to pay rent and comply with the terms of the lease. Exception - Buyer Occupies Property: However, if the foreclosed property is sold to a buyer, who will occupy the property, then the lender or successor-in-interest can terminate the lease with a 90 Day Notice. This new rule went into effect May 20, 2009.

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III. TERMINATING TENANCY AFTER FORECLOSURE

Month-to-Month Tenancy: If the tenant is the "borrower," a 3 Day Notice is required If the tenant is the "child, parent or spouse of the borrower," a 60 Day Notice is required. If the tenant(s) is/are "Non-Family, borrower does not occupy the property and rent is at "market," the notice required is 90 days. If the tenant(s) is/are "Non-Family, borrower does not occupy the property, and rent is not at "market," the notice required is 60 days. Full Term Lease: If the tenant(s) is/are "Non-Family, borrower does not occupy the property and rent is not at "market," the notice required is 60 days. If the tenant(s) is/are "Non-Family, borrower does not occupy the property, and rent is at "market," no notice can be given until the lease term ends. Exception: If property is sold to 3rd party, who will occupy the property, then a 90 day notice is required.

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IV. PROPERTY NOT BEING SOLD BY FORECLOSING LENDER AT FORECLOSURE/TRUSTEE'S SALE

The longstanding rules regarding the eviction of a tenant by a landlord in the normal context (i.e. not by foreclosure) still apply. These notice rules relate to the duration of time the tenant has been living on the property. 3 Day Notice: A 3 Day Notice to Terminate a tenancy based on failure to pay rent or a material breach of a lease can be used in several contexts (i.e. nuisance, violation of criminal statute, etc.). 30 Day Notice: A 30 Day Notice to Terminate a tenancy is used when the tenant has resided on the property for less than one year. 60 Day Notice: A 60 Day Notice to Terminate a tenancy is used when the tenant has resided on the property for one year or longer. Both 30 Day and 60 Day Notices are applicable when a tenant is on a month-to-month tenancy. If a tenant is on a lease with a fixed termination date - no notice to vacate is required when the term ends. (Cal. Civ. Code A?1946.1).

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V. CONCLUSION

Many people are surprised to learn that providing a tenant with notice is only the first step to evicting a tenant. Once notice has been properly served and the notice period has expired, further steps must be pursued to legally evict the tenant from the property. Fortunately, the attorneys at Hanley Law are experienced and know what steps must be taken to evict a tenant after notice has been served. Lastly, the notices and rules set forth above do not apply to mobile home tenancies (see Civil Code A?798.55 - A?798.61).