3 Questions About Evictions/Occupied Homes


#1

How do you deal with evictions after purchasing a home at auction, assuming a cash-for-keys deal can’t be worked out?

Would it be advisable, before the sale takes place, to approach the occupants of a house you are interested in purchasing to talk with them about options after the sale or even sign an agreement (subject to your purchase of the property)?

Is it better to deal only with vacant houses in order to avoid these issues altogether, or would that be too severely limiting on your options?


#2

Hi Lisa,
If the occupant is an owner you are not required to give them the 90 day notice to move. If month to month tenants are in the property then you are required to give them 90 days notice or honor the terms of their lease provided it was signed prior to the Notice of Default.
If you cannot come to a cash for key agreement then you would need to evict the occupant after giving them the appropriate notice and then filing an unlawful detainer.
Although it would be wise to see if you can make contact with the occupants prior to the sale you would not have any legal right to enter into an agreement until you are the owner of the property. The best thing that you can do is to at least start a dialog with them and see if they are hostile or appear to be on their way out. By developing a relationship you may have an easier time when it comes to negotiating the cash for keys.
Some investors prefer vacant homes so that they can avoid these problems. If the property is occupied it is at least helpful to know if they are owner or renters and factor in an amount for eviction/cash for keys expense.
Seasoned investors know whether or not they have the interpersonal skills to approach an occupant and determine the situation. If you do not have those skills it is better to find someone that can make contact and determine what the situation may be.
In another post I referenced an investor paying 30k for a cash for keys agreement. That investor also made over $250k on the sale of that home and the cash for keys stopped the occupant from stripping the property and selling off the fixtures which could have ended up costing him much more!


#3

Thank you, Michelle! Great info!

Why do month to month renters get 90 days if their lease agreement is only a 30 day contract?

If I file an unlawful detainer can I sell the house in the meantime, and if I sell the house before the eviction is complete, does the new owner have to start over with his own UD?


#4

Hi Lisa, SB 896 was signed into law in CA in 2009 that requires tenants on a month to month agreement when their rental goes to Trustee Sale to get a 90 day notice. You can read more about this at http://www.foreclosuretruth.com/?s=tenants+get+90+day+notice. You could potentially sell the property while you are evicting the tenants but it may be very difficult to get the inspections done if the tenants will not cooperate. You would certainly want to disclose all of this to any potential buyers.