Those who buy an occupied foreclosed property often find that the person(s) living there will not voluntarily vacate the property.  Before you take any action to evict, one threshold question needs to be answered:  Is the person on the property the former owner or the former owner’s tenant? The answer to this question is important because it will tell you what eviction process you must use to evict the person from the property.

Evicting the Former Owner

Once title is perfected, the buyer can evict the former owner with a special 3-day notice to quit.  This is usually combined with the 90 Day Notice to evict a tenant, discussed below, in situations where the new owner does not know the status of the occupant(s).   After the notice expires, the buyer must file an unlawful detainer action against the owner and pursue the action to a judgment.  The Court then issues a Writ of Possession, which directs the Sheriff to physically remove the owner from the premises on a specified date.    

Evicting a Former Tenant

The buyer of foreclosed property assumes the benefits and burdens of an existing lease between former owner and tenant.  The buyer becomes the tenant’s new landlord, under the same lease even if they don’t have a copy of it or know its terms. The buyer is entitled to the rent, but also assumes all the obligations owed to the tenant by the former owner/lessor, e.g., to maintain the premises in good condition, compliance with the tenant’s right to quiet enjoyment, etc.  .

Generally, a tenant with a term lease can stay in the unit until the lease expires. However, a new owner can extinguish a term lease by serving the tenant a ninety-day notice to vacate if (1) the new owner will be moving into the unit, (2) the tenant is the foreclosed-on owner or is their child, spouse, or parent, (3) the lease was not the result of an arms’ length transaction, or (4) the rent under the lease is substantially below fair market rent.  California Code of Civil Procedure § 1161b.  The burden is on the new owner to prove that the lease falls under one of these exceptions.  Id. 

In a month-to-month tenancy, the new owner can also evict the tenants with a 90 Day Notice to Vacate. After the 90-day period expires, the new owner is required to file and prosecute an unlawful detainer action against the tenant to a judgment.  A writ of possession is then issued by the court, authorizing the Sheriff to physically remove the tenant from the property.  90 Days’ notice is required regardless of whether there is a written rental agreement. CCP 1161b does not include any requirement that a tenant have a written lease to be entitled to a 90-day notice before eviction.

“Just Cause” Considerations

If you live in a jurisdiction that has enacted a “just cause” ordinance (i.e. requiring a legitimate reason for the eviction), you cannot be evicted during or after foreclosure unless the eviction is based on a reason authorized by the ordinance.    Courts have held that eviction protections continue to apply regardless of state or federal law.  Gross v. Superior Court, 171 Cal. App. 3d 265 (1985) and 123 Stat. 1660, Sec. 702(a)(2)(B).  Just-cause reasons may be a for-fault reason or a no-fault reason.  Some common for-fault reasons are that the tenant has not paid rent, has breached a lease term, or is causing a nuisance.  Owner move-in evictions (a landlord or their relative seeks to move into the unit) and Ellis Act evictions (the landlord desires to permanently remove the unit from the rental market) are common no-fault reasons for eviction.  Thus, unless the property owner has a just-cause reason under your local ordinance or under state law, whichever is applicable to your tenancy, you cannot be forced out of your home.

Section 8 Tenants

Tenants with Section 8 leases are protected by the Federal Foreclosure Act of 2009. This act says that Section 8 tenants have the right to stay in their home until the end of their lease. Section 8 tenants are under no obligation to accept money to leave their home or to heed a private eviction notice. If their lease ends less than 90 days after a foreclosure sale, the lender must provide at least 90 days’ notice before eviction procedures can start. Please contact Lynx Legal with any questions regarding the above, or if you are ready to start a case.  We can be reached at 888-441-2355 or [email protected].