What if I Get a Notice That My Landlord is Being Foreclosed On?

What if my landlord is getting foreclosed on? What do I do now?

Has anyone out there been in this situation before? What does this mean?  This occurrence unfortunately is happening  more and more in all real estate markets including here in San Diego.  The majority of landlords being foreclosed on don’t inform their tenants about any distress affecting their rental property until it’s inevitable and or tenants come home to eviction notices on their doors.

So what rights do tenants have, if any?  Fortunately tenants do have some rights, the most important one being an allotment of time to vacate the property. In most cases once a property has been foreclosed on month-to-month tenants will receive a 30 day notice to vacate said property and tenants, that are either on a lease or have lived at the property for a period of 2 or more years continuously, will receive a 60 day notice.

Another thing to consider is a tenant’s security deposit. More often than not landlords no longer have tenants’ security deposits and/or first or last month’s rents paid at the inception of the tenancy. More often than not landlords tend to spend these funds as well as the rental income being collected thus placing their tenants, who are probably counting on this money to assist in relocating, in quite a financial predicament.

One solution to this is something referred to as “cash for keys” that most foreclosing financial institutions have implemented in order to assure that the property is returned to them in good condition. Financial institutions have been cooperating and have been receiving good results from this unusual partnership cause by the mismanagement of funds on the part of landlords.

There’s plenty of useful information out there available to tenants, both on public and government websites, they can use to inform themselves on what their rights are. If you suspect that the property you’re renting is in financial distress, my advice to you is to do a little investigating and get informed. Taking a pro-active approach will help you greatly from being blindsided by something as serious as this.