Partisan Number 26
Renters and foreclosure
News stories about the foreclosure crisis in California and throughout the nation have focused on homeowners losing their houses due to foreclosure. Less attention has been paid to another group impacted by foreclosure: tenants renting property lost to foreclosure.
Commonly when a bank takes over property, it will make a demand on tenants that they vacate the property immediately. It is not uncommon for renters to be served with a notice demanding that they leave within three days, a demand which can be made on owners who have lost their property, but which cannot legally be made on renters. The Legislature recently passed a measure increasing from thirty days to sixty days the time which a renter must be given to find a new home after foreclosure.
More importantly, most urban areas in California have some form of eviction control under local ordinances (commonly called "just cause" ordinances). In most cases a foreclosing bank does not any legal right at all under those local ordinances to demand that renters leave their homes. Yet the banks, and unscrupulous "eviction mill" attorneys used by the banks, pretend not to know of these laws, and often threaten tenants that they will be sued, or even that they will simply be locked out of their homes. ("Self-help" lockouts of tenants of houses or apartments are always illegal in California; they can legally be removed only by the Sheriff following the judgment of a court in an unlawful detainer - or eviction - action.)
The reason for the aggressive actions by the banks is simple: it is their goal to sell property which they have taken by foreclosure as quickly as possible, and the value of an empty house is far, far, greater than that of a house occupied by a renter. So while the representatives of the bank may offer a small payment in exchange for the tenant giving up possession - often as little as $500 to $1,500 - their offer is far less than they stand to gain in increased price and quicker sales of property which is vacant. Any tenant of property which has been foreclosed should consult a local tenants' rights attorney or legal services agency before agreeing to move. This is especially true in cities with eviction control. Renters agreeing to surrender possession should receive reasonable payment for the value of their tenancy, or they might wish simply to stay put.
While renters may eventually be forced to move even in cities with eviction control if the property is sold to someone who intends to reside in it, they should never be forced out by the threats of the banks, real estate agents, or banks' attorneys without getting reliable information about their rights under the law in their particular city.
Bob Evans, a member of the Alameda County Peace and Freedom Party Central Committee, is a tenants rights attorney and a former member of the Berkeley Rent Stabilization Board.