Landlord-Tenant: What Do I Do When My Landlord Gets Foreclosed On?

All over the Valley, tenants are being confronted by landlords or their property managers informing the tenants that the house or apartment has been sold, that the tenants have to get out immediately, and that, if they don’t, the sheriffs will usher them out.

“There oughtta be a law . . .”, as they say, putting these people in jail. This sort of bullying is not only cruel in its effect on tenants, who are put into panic by these representations, but it is deceitful because, as these landlords and managers know full well, the foreclosure does not mean the tenant has to move.

One of the first and best things done by President Obama when he got elected was to push through the Landlord-Tenant Relief Act. Because it was rushed through in response to the housing crisis, it is not particularly well-written. But it is clear about some things, including the following:

First, if you have a written lease and you are in integrity with that lease (which usually means that you’ve paid the rent) at the time of the auction/sale, you are permitted to stay in that property until the end of the lease term. The new owner is entitled to your rent, but you don’t have to leave. The only exception is if the new buyer intends to occupy the property. But even in that event, you don’t have to move out upon auction or sale: they must give you written 90-day notice.

Most of the homes which go to foreclosure are not bought by anyone: rather, they go back to the lender. The lender does not qualify as an owner-occupier, so it cannot kick you out. And of the people who do buy at these auctions, virtually all of them are investors, rather than occupiers. So they can’t throw you out either. The fact that they might want to sell to an owner-occupier is irrelevant.

Second, if you do not have a written lease and are month-to-month, you still do not have to move until the new buyer gives you written notice, and you have ninety days from the date of that notice.

Word to the wise. A lot of tenants, when they get notice that the landlord is in default, stop paying their rent. Big mistake! You are protected by the Obama Act only if you are up to date in your rent. The one thing you do need to do if your landlord goes into default is keep a written record of your payments so that you can protect yourself when the new owner takes over

Landlord-Tenant: When Is It OK To Leave Early?

Most tenants move fairly often. There are no real roots holding the tenant where she is, and lots of reasons arise to move on. A bad apartment . . . a new job . . . a new boyfriend . . . you name it. Few tenants who come to see us have been in the premises for even a year before they want or need to leave.

But be careful why and how you leave. Do it for the wrong reason or in the wrong way and you are liable to leave wearing a judgment in the thousands which will haunt you for some time, as well as a black mark on both your credit and the landlord lists (which will make it difficult for you to rent again).

The instances when the Landlord-Tenant Act clearly permits you to leave early are when the condition of your living space falls in violation of building codes relating to health and safety (e.g., mold), or when your living space is not “fit or habitable” (e.g., overrun with scorpions), or when the common areas outside your living space are not “clean and safe”, (e.g., broken glass and gangs), or when basic services (electric, plumbing, heating, A/C, etc.) are not in “good and safe working order”, or when there are not “appropriate receptacles” for trash, or when there is not a “reasonable” supply of running or hot water.

But watch out for two things . . .

First, you cannot leave without giving 5-day, written notice to the landlord of the problem and your intent to leave. You can go only after the landlord fails to remedy the problem in those five days. But if you have done it right and for the right reason, your rental obligation ends on the fifth day, and you are entitled to the return of your security deposit (less acceptable deductions).

Second, notice that the events justifying your leaving are not matters of convenience but rather matters of urgency, like losing your air-conditioning in the summer or being drowned by multiple roof leaks. Every woman should be able to have a working refrigerator, but the lack of one does not make the premises uninhabitable. For this sort of thing, you will have to use the self-help statute, which lets you subtract for this sort of problem after notice and up to a certain amount, but does not allow you to leave.

[This is a short summary, and is not meant to be a substitute for going to see an attorney who represents residential tenants.]