The fastest a Tenant can be evicted is 90 days for the notice and plan on another 60-90 days for the UD and the Sheriff Lockout and this is only if the Tenant does not contest/answer the UD.
There are a few exceptions to the rule. However if this is an owner occupied purchase and this is not section 8 housing, I find it hard to believe that a court has awarded this tenant a right to hold this property hostage for the next seven years.
Under Federal Law, Title VII - Protecting Tenants At Foreclosure Act, concerning federally related mortgages, the immediate successor in interest to the property can issue a 90 day notice for the tenant to vacate.
The tenant with a valid lease may remain till the end of the term of the lease unless the immediate successor sells the property to purchaser who will occupy the property as a primary residence.
If the tenant does not have a valid lease, they still get a 90 day notice to vacate. If the tenant does not vacate then the UD process needs to be started.
The law is very specific as to what they consider a valid or "bona fide" lease:
Under section B. Bona Fide Lease or Tenancy - for purposes of this section, a lease or tendencies shall be considered bona fide only if
1) the mortgagor or the child, spouse, or parent of the mortgagor under the contract is not the tenant.
2) the lease or tendency was the result of an arms-length transaction; and
3) the lease or tendency requires the receipt of rent that is not substantially less than fair market rent for the property or the unit's rent is reduced or subsidized due to federal, state or local subsidy.
There are a few other issues that are problematic with this situation. If there is a hostile tenant on this property, how can the buyer get a physical inspection done and how can an appraiser get access to the property as the appraisal will be a requirement of the loan.
If the tenant is so driven to try and lock up this property in a seven-year lease and try to purchase back the property, I find it hard to believe that they are cooperating with the sale of the property.
Buyers today, purchasing as non-owner occupiers have to qualify for the house they are currently in, whether paying rent or mortgage, and for the home they're going to purchase. Without cooperation from the tenant, the buyer's lender will not proceed lending money on this property without an appraisal.
Sure you can tie up a property in escrow, but that does not mean you can get loan approval.
The foreclosing banks have done a poor job dealing with these tendencies over the last few years. I represent a large bank as a listing agent on their forclosed properties in East Ventura County and the San Fernando Valley. We ran into this situation and to add to it, the city of Los Angeles as a whole other set of rules that go on top of this federal rule.
The tenant refused to show us a lease, the bank was afraid to evict, the property sat for five months, the bank hired an auction company to auction off the property in a live auction. Potential buyers had no ability to inspect the property. The property sold at auction to the highest bidder and it was a winning bidder's responsibility to deal with the tenant and one issue was how could they complete the contract if the tenant would not allow access for an appraisal.
This property will most likely end up in a similar live auction. We auctioned two properties that day and they both sold 15% higher than they should have, but does matter, because when you have 60 people standing around, people break all their own bidding rules and overbid every time.
This post is not intended to be legal advise, please contact an attorney and try to find an attorney that specializes in tenant landlord law in the state of California.
Last, if you have never been a landlord before, starting off with a complex tenant issue in not the best way to go into the rental property business. Better to buy a property you can have possession of at the close of escrow, find a tenant and start without a major issue.
Please keep in mind that California real estate law is specific to California. What is done in other states really does not matter as you will be dealing with California attorneys, California courts and California Law.
Denny Beckham, Real Estate Broker
Your in-laws have two choices, 1, speak to a lawyer and decide if this house under these terms is what they bargained for or 2, move on and find a house without all the complications.
Based solely on what you have described, I personally would not want to be involved with this mess. The buying, selling and renting among this family sounds like a scheme to avoid foreclosure and or paying for the house.
If they are not keeping their word under a signed mortgage contract, what hope do your in-laws have or expecting them to pay their rent, take care of the property or even leave when the lease is up?
Life is too short to buy a battle; my encouragement would be to find a nice home without all the complications.
Also, he cannot buy the property just because he wants to. He would have to submit an offer to the bank through his Realtor. He would be in competition with your inlaws and the bank would take the best offer. However, your inlaws are in contract to purchase already and he can only submit a backup offer
now as their offer has been accepted by the bank and they are in contract.
Don't immediately race to see a lawyer until you have all the documentation. The seller, which is the bank, must provide your inlaws with the lease, if it exists, because it goes with the house. That is their responsiblity when selling the property. If they don't have it, the issue is moot and your inlaws will have to evict this guy.