When A Landlord's Rental Property Is Being Foreclosed

In the past, a foreclosure invalidated a lease. Thus for example, if a landlord purchased a house at foreclosure with existing tenants, he could serve a thirty-day notice on the tenants and evict the tenants.

However, the City of Los Angeles has added a foreclosure eviction moratorium to its rent control ordinance. Los Angeles City Council enacted the Foreclosure Eviction Ordinance on December 17, 2008. Consequently, landlords cannot evict tenants from rent-controlled properties in foreclosure. The fact that the property changes ownership (from the landlord to the bank), does not change the lease under the rent control ordinance. So, if the landlord's property is foreclosed, he cannot evict the tenant because he no longer owns the property and a bank cannot evict the tenant merely because it foreclosed on the property.

Most likely, as standard practice, a bank will serve a tenant with an unlawful detainer complaint. The tenant should get legal advice immediately to determine his next course of action. It is important to understand that while the tenant is still living in the rental property he must pay rent to someone.