What Happens To Tenants In Foreclosed Properties?
Every year, thousands of California tenants are displaced by private investors and banks acquiring foreclosed properties. A tenant is not responsible for creating the foreclosure crisis. But many tenants dealing with foreclosure situations are attempting to stay in their homes, keep their utilities on, and protect their security deposits.
Brockmeier Law Group, a law firm in California that focuses on real estate, business, and personal injury law, can help.
The first step in a California foreclosure is a missed payment. It can be the result of a lost job, serious illness, or another circumstance beyond the property owner’s control. Unfortunately, it can be difficult to play catch up with late fees and interest.
The exact point a loan is considered “in default” depends on the terms of the mortgage. For most, it happens when the payment is 90 days late. This may be the time to seek help from an Irvine foreclosure attorney.
The next step is when the property is officially in default at Day 120. The mortgage holder must file a Notice of Default with the court. To get out of default, the property owner can pay back the payments along with interest and fees while keeping up with property taxes and insurance.
After receiving a Notice of Default, the owner will have three months to get the loan current. A real estate attorney Irvine can help with the details. After three months, the bank officially sets a date for the auction of the property. Finally, the owner will receive a Notice of Trustee Sale via certified mail.
The mortgage holder has to wait at least 20 days after the Notice of Trustee Sale is sent. After that, the court or bank can postpone the sale for up to a year, at which point the property owner will receive a new Notice of Trustee Sale for the property to go to auction, at which point it’s sold to the highest bidder. A real estate attorney Irvine CA can help with the postponement.
For a tenant in a foreclosure situation, the terms of the lease do not change. Therefore, both the tenant and landlord must continue to follow those terms.
Usually, the landlord has six months from the date of the foreclosure sale to settle the mortgage. This is referred to as the “redemption period.” A tenant cannot be told to vacate during the redemption period except for lease violations or if the lease expires.
If the landlord stops the foreclosure, the tenant may not have to move from the property. However, if the landlord does not stop the foreclosure, there will be a new property owner at the end of the redemption period.
The new owner has the legal right to ask the tenant to move even if the lease is not over. But, the new owner must still provide a written notice stating he or she wants the tenant to vacate.
Give Brockmeier Law Group a call at 310-425-3431.