Skip to main content

New California Foreclosure Law - Tenant/Borrower's Rights

Traditionally, a residential tenant's right to possession whether month-to-month or long term lease (one year or more) was terminated by Foreclosure of a bank loan. The lender simply would serve a 3-Day Notice to Quit and proceed with an eviction suit.

Due to the foreclosure crisis of 2008-2010, new laws were passed to provide protections to tenants depending on the type of tenancy, the tenant's relationship to the owner-debtor, and whether the terms of the lease were at market rate.

The result is that the tenant's right to possession will be terminated by foreclosure, but the tenant will be given time to vacate the property after foreclosure.

New California Senate Bill 1149 (SB 1149) - "Post Foreclosure Protection for Tenants":

Commencing January 1, 2011, a notice to terminate a residential tenants who remains after Foreclosure sale must generally include a statutory notice of the tenant's rights. This requirement, which sunsets on January 1, 2013, applies to immediate successor-in-interest for one year after a foreclosure sale. The tenant's rights must be on a separate cover sheet or, for a 90-day termination, incorporated into the notice to terminate. Another provision of this bill protects a residential tenant's credit by generally prohibiting a court clerk from revealing unlawful detainer court records, unless the plaintiff prevails at trial.

Notice to terminate residential tenancy after foreclosure:

Who is Tenant:

Notice to Terminate Tenancy:

Borrower

3-Day Notice

Child, Parent or Spouse of Borrower; Borrower does not occupy property

60-Day Notice

Non-Family are Tenants; Borrower does not occupy property; Rent is at market rate

90-Day Notice

Non-Family are Tenants; Borrower does not occupy property; Rent is not at market rate

60-Day Notice

Who is Tenant:

Notice to Terminate Tenancy:

Non-Family are Tenants; Borrower does not occupy property

60-Day Notice

Non-Family are Tenants; Borrower does not occupy property; Rent is at market rate

No Notice can be given until lease term ends

Exception: If property is sold to 3rd party, who will occupy the property

Additional resources provided by the author

Rate this guide


Recommended articles about Real estate

Can’t find what you’re looking for?


Post a free question on our public forum.

Ask a Question

- or -

Search for lawyers by reviews and ratings.

Find a Lawyer