Hello Sean, I just bid and won a property. (Rent Skimming)

Upon arriving we noticed some people living in the back end of the house. Upon asking who they are paying the rent to, they said said a name other than the previous owner. Later, I find out they are paying to someone who was interested in buying the property who obviously was not happy to find out that the bank auction the house to me. Can you shed some wisdom and share with me the proper way to handle this?

Yes, it is called Rent Skimming. Basically entails finding vacant houses and renting them despite a lack of ownership. Was a big scame in the 90’s and is illegal in CA - see Civil Code 890.
As far as how to handle it is up to you as to whether to bring the offender to the attention of authorities or not. If this is a competitor at the steps you’ll want to think that through carefully.
As for the tenants, this doesn’t change anything, you’ll have to give 60 days notice and go through the standard eviction process - or preferably do cash-4-keys.

Sean, what do you mean ‘competitor at the steps’?? I thought you give them a 30 day notice.

Senate Bill 1137 changed the notice to tenants in foreclosure to 60 days. ? When you said the person who did this was someone that was interested in buying the property, I thought it might have been another auction buyer. If so it would be someone you would continue to see at the auctions and you’d want to think through how aggresively you want to pursue legal action against someone you might see everyday.