QUESTION
90-Day Notice to Vacate from New Owner of Foreclosed Condo
Asked on Sep 03rd, 2016 on Real Estate - California
More details to this question:
Lease expires on June 2017, and new landlord who purchased the foreclosed home sent us with 90-Day to Vacate based on the reason that his daughter (who's also on the buyer's names) is intended on using this property as her primary residence. How do you prove or know that this is really the case? For Fixed Term Lease, my understanding is that new tenant needs to honor the existing lease unless this is the case. Also we paid cash as deposit to the previous owner, and new owners wants some kind of proof as bank statement showing that i withdraw exact amount, etc. He wouldn't accept receipt written by the previous owner. Isn't cash receipt enough??? Lease Agreement shows that the amount has been received as two months rent has been received.
1 ANSWER
The outcome depends on several facts. Was there an actual completed foreclosure sale, by a court proceeding or a public auction? If not, then the transfer from the prior owner to the new owner or to the lender and then to the new owner, did not cancel the lease. You are entitled to stay unti the end of your lease.
If a full foreclosure sale was actually completed, then it depends on which agreement had priority, your lease or the lender's loan. If your lease was signed and you started occupying the unit before the loan was recorded, then you have priority and the lease survives. If the loan came first, then you lose. If you were asked to subordinate to the loan, then you lose, unless the subordination agreement included a provision that the lender would recognize and comply with your lease. Some tenants will not sign a subordination agreement unless includes such a provision recognizing the lease, but sometimes tenants don't know that they can and should insist on it.
The Ellis Act, which gives an owner the right to move in, is a way to avoid rent control. It does not cancel your lease. His daughter has to wait until your lease expires, unless it did not survive the foreclosure, as discussed above.
Regarding the deposit, if it's less than $10,000.00, you can sue for it in small claims court. If you agree to leave early, you could insist on some free rent and return of the deposit as a condition to be paid in order to induce you to move out early. Such relocation agreements are common. Get it in writing.
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Dana Sack
Answered on Sep 07th, 2016 at 10:15 AM