Do Renters have to continue to pay rent?

Once the trustees notice for sale is posted on the rental unit are the renters still obligated to pay their rent?

YES. Nothing about foreclosure changes the obligations you agreed to when you rented the home, unless your rental agreement has a clause specific to foreclosure. Really doesn’t matter if they make the payment or not.
Once the home is foreclosed on, your lease or rental agreement is “wiped out”. So the buyer (or bank) that ends up with the property is not bound by that agreement… though even then you still must pay rent (typically fair market rent).

Sean - does the new owner who bought the home at trustee sale in CA have to create some sort of MTM rental agreement for the tenant? If it’s not required, do you suggest creaiting one? I assume it’d be a 90 day agreement if so, since you have to give them 90 days to move out now, correct?

Probably a better question for an eviction attorney, but the only agreement I ever try to get occupants to sign is an agreement to move out by a particular date and leave the place clean, ideally together with a stipulated judgement in the event that they don’t.

Sean is an idiot. All leases survive a foreclosure and the new investor must honor your lease and yes, you have to pay him rent as indicated by your lease. If you are a month to month tenant, the new owner must give you 90 days to vacate.

Sean…have some sort of idea of what you are talking about before answering a question. Once a home is foreclosed upon your lease agreement is “wiped out”? Are you serious. This is not true. Again, think before you speak primarily to avoid giving reckless advice, but even to avoid looking like a complete moron. Too late on the latter…idiot.

Actually I was dead right until the law was changed on 5/20/09 when Obama signed the Helping Families Save Their Homes Act of 2009, which we reported on 5/25/09 here: You seem to need to vent some anger… please find another site for that.

And besides my message below, know you are wrong here as well. Not “all leases survive”… only residential, arm-length leases at fair market value. Plus you don’t have to give them “90 days to vacate”, you have to give 90 days notice before proceeding with eviction - which then varies quite a bit by state.

I have served a tenant with a notice to quit and provide proof of lease. we ask for the proof of lease so we know how much they should continue to pay if they decide to use there legal 90days. i have not been given proof nor have i received there 1st rent payment. Can I now give them a 3 day notice to pay rent or quit? I have seen other investors do this to speed up the eviction process in tenant occupied homes. Is this legal?

Hi Carlos, The statute is silent regarding the payment of rent for the 90 day period which makes this very confusing for investors. You are required to give a tenant in CA 90 days notice following a trustee sale. It is my understanding that you cannot evict them during that time for non-payment of rent. That is not to say that you cannot potentially seek a judgement at the end of the 90 days for past due rent or include that amount if you are forced to evict them after the 90 days. This is precisely why so many investors choose to offer a cash for keys incentive and negotiate an agreement for the tenant to move out by a certain date.

If after forclosure, and the tenant
refuses to pay rent to the new owner, can i now start and eviction processes based on NON-Payment?


ATTENTION: FYI - The “Notice of foreclosure” per the PTFA of 2009, as amended is exactly the date on which the TITLE transfers and not a moment before. So if you leased a home even 2 weeks before the end of the foreclosure process, your lease is fully protected under the PTFA 2009:

The financial reform bill passed by Congress will extend the Protecting Tenants at Foreclosure Act (PTFA) through the end of 2014.

PTFA, originally enacted in May 2009, allows renters whose landlords have lost their properties to foreclosure the right to stay in the home for 90 days after the foreclosure or through the term of their lease. Without the new extension in the financial reform bill, the law would have expired at the end of 2012.

The new law also clarifies the date of a notice of foreclosure as the date of a completed title transfer: ?The date of a notice of foreclosure shall be 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.??

RE: DO NOT PAY RENT – On the matter of paying rent to a slimeball LIAR owner who scammed you and failed to tell you the house he/she leased to you is in default or foreclosure. This happens every day. The owner of the house I lease did this. I found out he was in default, and DID NOT PAY A DIME in rent from thereon.

What I did do, is send this lying piece of trash a notice that HE was in default of the lease for failing to make a mortgage payment, which is a fundamental component of EVERY lease.

Obviously the owner has a duty in every state to >> provide

While MOTS suggestion will likely work in practice, I think he is wrong that paying the underlying mortgage is a component of any lease. I personally think the idea that landlord “defrauded” the tenant by taking the rent and not paying the mortgage is ludicrous. The landlord still owns the house, he’s 100% entitled to rent under the law, and if the landlord has issues with his lender that’s between them… at least until it ACTUALLY impacts the tenant… With that in mind he may be right that you could have a case that the foreclosure interfered with your right of quiet enjoyment (assuming it has actually interfered (ie. people knocking on the door, taking pictures, etc). As for jeopardizing your right to access the property for the entire lease term, I don’t think that argument makes any sense for 2 reasons - first the possibility that you could lose access is not the same as actually losing access, and it would be hard to prove you suffered any actual damage until you actually lost access, and second, federal law currently allows you to stay in the lease until the end of term even if a foreclosure occurs, so there isn’t really ANY possibility of being damaged, or “jeopardized” on this front.

thx for your opinion, as wholly incorrect as it is. Read the Law re: the provision of the property that is leased. Failing to make a mortgage payment is a material BREACH of lease. Further collecting rent while not making mortgage payment is a FELONY in some venues, “expert” sean.

MOTS - Please feel free to point to the specific laws, especially the one that would make a civil matter between a landlord and tenant a felony. Until then consider me completely unconvinced of your opinions. By the way the term you are looking for is “Rent Skimming”, the text of the California law on the subject can be found on our website here: Note specifically the definition of Rent Skimming: “(1) “Rent skimming” means using revenue received from the rental of a parcel of residential real property at any time during the first year period after acquiring that property without first applying the revenue or an equivalent amount to the payments due on all mortgages and deeds of trust encumbering that property.” So if the person has owned the property for more than one year, simply not paying the mortgage does NOT qualify as rent skimming. Further a tenant (ie you) only has a cause of action to the extent they were damaged (my point earlier): “(d) A tenant of residential real property may bring an action against a person who has engaged in rent skimming with respect to that property for the recovery of actual damages, including any security, as defined in Section 1950.5, and moving expenses if the property is sold at a foreclosure sale and the tenant was required to move.” Finally, it is only CRIMINAL (though no mention of felony), if the landlord does it five times or more: “(a) Any person who engages in multiple acts of rent skimming is subject to criminal prosecution. Each act of rent skimming comprising the multiple acts of rent skimming shall be separately alleged. A person found guilty of five acts shall be punished by imprisonment in the state prison or by imprisonment in the county jail for not more than one year, by a fine of not more than ten thousand dollars ($10,000), or by both that fine and imprisonment.” Having looked at most standard forms of residential leases commonly used in CA I’ve seen none that make default on the mortgage a breach… though I do think that should be a standard clause, and I would personally require it if I were to lease a property. I even suggested the idea to the California Association of Realtors some time ago (haven’t checked recently, they may have added it).

@ sean – Using FALSE PRETENSES TO FRAUDULENTLY STEAL MONEY [in excess of $500 in most venues] is a FELONY known as GRAND THEFT. Criminal FRAUD is different from civil fraud, and is no less applicable in a “landlord/a/k/a ASSHOLE” Tenant deal. For a SCUMBAG owner to lie to a Victim Tenant and state that a house is not in default/foreclosure, then fraudulently collect funds in excess of $500, is a FELONY and is both civil a and criminal matter. Wake up dude!!!

MOTS, please stop, you are starting to make a fool of yourself. Understand the landlord continues to own the home up and until the day the home is sold at foreclosure auction. During that time they have every right to rent it, and collect rent. They haven’t stolen anything from you - you paid rent, you got to live there, and as such they lived up to their end of the lease COMPLETELY. Until they ACTUALLY violate the terms of the lease, ie impacted your right to quiet enjoyment, collecting rent AFTER it has actually been foreclosed on, etc. you have NO case.

“They haven’t stolen anything from you - you paid rent, you got to live there.” Sean, I respectfully disagree. When an owner fails to provide the contracted structure and deprives the Resident of their right to a peaceful, non-chaotic, RIGHT of QUIET ENJOYMENT, that owner DID STEAL from that Resident, and their entire family.

Being forced to have to endure the tremendous 2 month long SEVERE STRESS of: 1. finding a new home, 2. coughing up new deposits, 3. packing, 4. Incurring moving costs, 5. unpacking, etc etc etc etc etc, because of the failure of the owner the honor the lease contract and keep the note current, actually is >>> extremely harmful