The following is a summary of selected post-foreclosure eviction laws:
California Law. Under California law, a nonjudicial foreclosure ("trustee's") sale extinguishes all liens and encumbrances (including leases) subordinate to the deed of trust (i.e., those created after the deed of trust). The purchaser at the foreclosure sale may file an eviction after giving the occupants 3 days' prior written notice to quit, unless the occupants are tenants or subtenants of residential property, in which case 60 days prior written notice to quit is required before an eviction is filed. [See, California Code of Civil Procedure §§ 1161a & 1161b]
Federal Law. Under the Protecting Tenants at Foreclosure Act of 2009 (the "Act"), "bona fide" tenants, as defined by the Act, are given greater protections. Under the Act, a foreclosing lender desiring to terminate a bona fide tenancy without cause must give the tenant at least 90 days prior written notice to vacate. If the tenant has a bona fide lease with a term, the foreclosing lender may not terminate the tenancy without cause prior to the end of the term of the bona fide lease. A lease or tenancy is considered bona fide only if all of the following conditions exist: (1) the lease or tenancy was entered into prior to the date of the notice of foreclosure; (2) the tenant is not the mortgagor or the child, spouse, or parent of the mortgagor; (3) the lease or tenancy was the result of an arms-length transaction, and (4) the lease or tenancy requires the receipt of rent that is (i) not substantially less than fair market rent for the property, or (ii) the unit's rent is reduced or subsidized due to a federal, state or local subsidy. The date of a notice of foreclosure is deemed to be the date on which complete title to a property is transferred to a successor entity or person as a result of an order of a court or pursuant to provisions in a mortgage, deed of trust, or security deed.
Local Law (Rent Control / Eviction Control). In California cities subject to local rent/eviction control ordinances, a tenancy between the foreclosing lender and tenant is created by operation of law. [See, Gross v. Super.Ct. (Victoria Mews Consortium) (1985) 171 Cal.App.3d 265, 217 Cal.Rptr. 284] Because these ordinances ordinarily provide greater tenant protections than federal or state law, the local rent/eviction ordinance will normally govern the grounds for termination of the tenancy. Most local rent/eviction control ordinances limit the grounds for eviction.
Disposition of Abandoned Personal Property. Known as "personal property evictions" in many states, in California, the procedures for disposition of abandoned personal property are set forth in the Civil Code § 1980 et. seq. Generally, the landlord is required to serve an 18 Day Notice of Right to Reclaim Property. The form and content of the notice is specified by statute. If the owner of the personal property fails to reclaim the personal property within the notice period, the landlord may dispose of the personal property unless it is valued over a certain dollar figure ( $300 or more for residential premises), in which case an auction must be held.
