Foreclosure in San Francisco>Question Details

Michaeltk, Renter in San Francisco, CA

I live in a house that was foreclosed in January. The bank says it doesn't want rent "at this time." Will the bank make me pay back

Asked by Michaeltk, San Francisco, CA Thu Mar 31, 2011

rent? I'm in CA.

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Dear Michael, I agree with Tim. They technically have the right to collect rent from you if you are in a lease that carried over from the prior owner that is still in full force and effect. That is why the deed of trust that is recorded will say "Deed of Trust with Assignment of Rents". However, when the bank enforces the termination of the lease or a month to month tenancy contract they would be wise to simply let you vacate without any further attempts to collect past rent so that you are more inclines to vacate peacefully and timely. Many times the lender will offer cash for keys as well.

Talk with a real estate attorney to best understand what your rights are and expert advice. Good luck to you and I hope I helped a bit.

Diane Wheatley, Broker
diane@moveupproperties.com
1 vote Thank Flag Link Thu Mar 31, 2011
Michaeltk:

You do not have a rental agreement with the bank just because the property was foreclosed on - unless there is a clause in your rental agreement. The bank will probably go through the process of having you evicted from the property at some point in time, subject to Fed/CA/local laws.

The following should help in regards to your situation (from the CAR website):

[Quote]
In May 2009, the federal government enacted the "Protecting Tenants at Foreclosure Act" giving tenants new protections, such as the right to stay in their homes for at least 90 days after receiving an eviction notice. While state and local laws also contain strong protections, unlawful evictions and harassment of tenants continue.

Tenants should know their rights under the law. These rights include:

-Tenants cannot be required to move out of their homes for at least 90 days following an eviction notice.
-Tenants can insist on staying until the end of their leases. The only exception occurs when the new owner of a single-family home wants to move in.
-Tenants can require banks and their agents to put all communication in writing.
-Tenants are not obliged to accept "cash for keys" money to move out sooner than the law prescribes.
-Harassment, such as improper entry into a person's home, shutting off water and lights, or changing the locks without a court order is illegal.
-The above rights extend to tenants living in government-subsidized Section 8 housing, who may also have additional protections under state and local laws.
-If a city has a just cause for eviction law, a landlord must have a specific reason to evict a tenant, and foreclosure may not be recognized as a legitimate basis for eviction. Tenants should check local ordinances.

Sixteen cities in California have just cause for eviction ordinances: Berkeley, Beverly Hills, East Palo Alto, Glendale, Hayward, Los Angeles, Maywood, Oakland, Palm Springs, Richmond, Ridgecrest, San Diego, San Francisco, Santa Monica, Thousand Oaks, and West Hollywood.

[End Quote]

If you ever believe your rights as a tenant have been violated you can file a complaint with the Attorney General's Public Inquiry Unit at http://ag.ca.gov/consumers/general.php

Best, Steve
2 votes Thank Flag Link Thu Mar 31, 2011
Michaeltk:

Can't tell from your question if you owned the house and it's been foreclosed upon or if your landlord was the one who defaulted. If you're a tenant, then you have all the rights like you did before: http://www.sftu.org/sale.html And, if the bank is really not willing to accept your rent, I'd put it into an escrow account and keep all the deposit slips to show that you were ready, willing and able to perform on your rental obligations. Let me know if you need more.

Best,

Kevin
1 vote Thank Flag Link Thu Mar 31, 2011
You may want to contact a local attorney at this point.
0 votes Thank Flag Link Tue May 26, 2015
If the bank advised you not to pay rent at this time then you should be saving all these missed payments in an account, which hopefully will help you to move before the bank initiates eviction proceedings. you will not be able to live rent free forever and at some point the bank will require you to pay rent and eventually vacate the premises. Do not wait until the last minute to relocate. Do it now before it is too late and while the bank is being generous. As you are aware from the news last year California had the 3rd highest foreclosure filings. If you plan to rent again it is highly recommended that you verify the property is not in foreclosure before you agree to a lease. To receive more information about Foreclosure Rental Alerts, click the link here, http://www.foreclosurecourt.org/find-out-if-your-home-is-in-…
0 votes Thank Flag Link Wed Apr 6, 2011
If you have a lease and are not month-to-month, I believe the bank will need to honor the lease terms as the new owner. However, if they inform you in writing that they do not wish to collect rent, you are better off clarifying their intent in the future, i.e., will they try collect the "forgiven" rent.

Oggi Kashi
Paragon Real Estate Group
CA DRE 01844627
Web Reference: http://www.oggikashi.com/
0 votes Thank Flag Link Fri Apr 1, 2011
I'm not an attorney but my gut instinct as a 40 year RE buy/sell veteran of distressed properties tell me you'll be OK. If the bank is not giving you a pay or quit notice or threatening you with a law suit. I wouldn't worry too much.
0 votes Thank Flag Link Thu Mar 31, 2011
Hello,

Your contract was with the previous owner only. Since you do not have a contract with the bank, I dont think they can come back at you later for rent. This is not meant to be considered as legal advice, just speaking from experience.
0 votes Thank Flag Link Thu Mar 31, 2011
You may want to draft something in writing as to your understanding of your tenancy with the bank and send it certified mail, this would be an effort to get the bank to respond to you in writing. Unless it is in writing it is hard to prove otherwise.
Web Reference: http://terrivellios.com
0 votes Thank Flag Link Thu Mar 31, 2011
San Francisco has a rent stabilization board that is best equipped to offer you the best advice on how you and "the new owner" of the house your rent ought to proceed. It is probably for that reason that the foreclosing party isn't proceeding without first checking out the ramifications. That said, I saw a similar situation on another site, where the responders included a landlord/tenant attorney, and their view was that although the owner isn't taking your rent payment presently, you still technically owe it, and to show your good intentions/good faith, you ought to put the equivalent funds to your rent -- on a monthly basis, in a bank/escrow account where, if and when the new owner demands (potentially) their payment(s), including any arrears, you will be prepared to comply and on time.
0 votes Thank Flag Link Thu Mar 31, 2011
Michaeltk:

Tim/Diane/Kevin bring up a very important points about the Deed/assignment of rents and whether you are the owner of the property, which I did not address!

You should seek professional advice at this point so your exact situation can be reviewed.

-Steve
0 votes Thank Flag Link Thu Mar 31, 2011
Does not want rent at this time leaves the recourse to get rent back later. You should at this time find a new dwelling to rent, and leave as soon as you can, the bank can at anytime ask you to leave. You need to go to the court records and find out if you were included as one of the members or names mentioned in the foreclosure order. The Bank vs Home owners, renters, lien holders and the such is often commonly mentioned in the foreclosure document. It means that as first or Primary lien holder, that the bank basically mentioned everyone who had any interest in the property and motioned against all when asking for judgment of foreclosure.
0 votes Thank Flag Link Thu Mar 31, 2011
well, this is a dilemma Banks have ... if they get you out of the house, then the house will be vacant. And you know what will happen to vacant home right ?? it will cost too much to bring it back up to sellable condition. They collect no payment from the home owner any way. If they let you stay, they don't want to collect rent because they are not in the rental business. Too much paperworks to track all that. So guess what ... they rather have you stay there to "watch" their house in return for "free" rent. The only catch is they are so vague about the money stuff, and if they are really nasty , they can send you a collection notice for owe rents. I would write the bank a "nice" note saying some thing like "thanks you for the opportunity of housesitting in return for non-rental payment. Please inform me in writing of any financial obligations etc etc etc .... " just to cover your interest. Most likely they wouldn't response but at least you have a letter saying so.

ps: send them registered mail.
0 votes Thank Flag Link Thu Mar 31, 2011
The only one who will give you that answer is the Bank. Although, I will say that if you went in to a foreclosure and they will not accept payments or rent, a question you may ask your bank is "are you in a strict foreclosure status. Which means they want you out and they are close to getting the Sherriff to evict you.
0 votes Thank Flag Link Thu Mar 31, 2011
I suppose it can. I assume you have a lease that is still in affect and if so you owe rent to the owner who is now the bank. They might wave it and ask you to leave when the lease is up, you just need to talk with the new owner. Banks don't like being landlords.
0 votes Thank Flag Link Thu Mar 31, 2011
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