Rental Basics in Oakland>Question Details

Jos04hua, Renter in Oakland, CA

Is renting a property that is in foreclousure without telling the tenat know is fraud?

Asked by Jos04hua, Oakland, CA Fri May 6, 2011

I signed a contract with my tenant I told her that a wanted to rent the property for a long time more than 2 years, a month latter I found that the house was in default, I spoke to her and she said that she was in a loan modification process. Latter I realize that by law modification cannot be done in a rental property. The house will be sold on May 20th, is this Fraud? Should landlord reveal such information to potential tenants? Can I sue the landlord?

Help the community by answering this question:


Before you spend money on an attorney, you have rights under the California Landlord Tenant law. I've attached a link you should look over and see how it addresses your situation. Should the property sell at auction, you will likely have some time to move, but I know that's not what you wanted.
Where you feel you've been misled by an agent, you may be able to make life difficult for her. You can start by contacting her broker and if necessary the local MLS, Local Board of Realtors if she is a member or State Licensing Office.
Give her and or her broker a chance to do something before you escalate, it could be beneficial to everyone.
2 votes Thank Flag Link Fri May 6, 2011
You can't sue unless she collects money after the property sale. For her not to disclose is more of a moral issue and unfortunately, this is happening often all over the US.

In fact, it's happening right now to my Fiancee, and she is unsure who to pay, in Los Angelese, California.

If you need assistance, contact Your county housing department to file a complaint or obtain information on your specific situation.
2 votes Thank Flag Link Fri May 6, 2011
you have more then just the sue part going here. Can the bank foreclose while you have a contract?
You better get legal advice fast.
Web Reference:
1 vote Thank Flag Link Fri May 6, 2011
Oh wow, I'm sorry you have to go through this. Contact your county and ask what you can do... It's a very sticky situation, because if you stop paying rent she can still report you for it. The least you can do is make a complaint to the county, as I previously suggested, and they would give you the best advise.

Here on Trulia, we are agents not attorneys or city employees so it's hard to advise on legal issues. Contact your county and the will advise you on your options and provide you options on how to respond to this situation.
1 vote Thank Flag Link Fri May 6, 2011
Hi Josh, The owner should have told you that the property was in foreclosure. Since they still own property they the have right to rent it out but should have disclosed. You do have rights (tenant rights) Oakland has Rent Control ?Just Cause eviction laws. If a represenative / realtor comes knocking on your door, they will most likely advise you of your rights and offers some options. 1.) Continue the lease for a period of lets say 1yr. 2.) Offer Relocation Assistance( Cash for Keys). If you paid a deposit for your rental you should still be entitled to that deposit from your landlord. You should contact the City of Oakland and look up tenant rights for the City of Oakland. Hope this helps and best wishes to you.
1 vote Thank Flag Link Fri May 6, 2011

If you have owner representations in writing its going to be hard to win anything. Many tenats quit paying when they learn the home is on its way to foreclosure so It's good that you are honoring your end of the bargain. The sale date is certainly problematic but most banks will not foreclose if they have an open file, the problem you have is that if this owner has been less than forthcoming with you, who says they are being forthcoming with the bank? Next time make a friend with a title rep and on the next property ask them to check public records to see if the owner has equity, when they bought the home, when they last refi'd and it will be pretty clear who the reputable owners are and are not.

The good news is that if the bank does foreclose you will get your deposit back (there a big damages if you don't) plus the bank will give you a check to move...
Web Reference:
0 votes Thank Flag Link Tue May 10, 2011
You have been given some excellent resources and advice.

As an agent your landlord is expected to know the law. Unfortunately not all agents or Brokers for the matter are up to speed on the laws.

California renters has certain rights. Any lease for longer than a year must be in writing. Even thought there is a scheduled sale date, it is possible the owner can have that postponed.

If the home owner doesn't have money to pay her mortgage I doubt that there is much to sue for so keep this in mind.

The home owner mortgage documents may have language which authorizes her bank to receive any rent money.

So with all this information you can see that this can be a sticky situation. The short of it is that at some point you may need to move and that may be where you could focus your energy.
Web Reference:
0 votes Thank Flag Link Sat May 7, 2011
Hi Jos04hua,

The best thing for you to do in my opinion is get some free and/or cheap LOCAL legal advice.. call the City of Oakland Rent Arbitration Board: They are free, they know the local law, and will give you some basic advice as well as suggest resources. I would see what they say and also consider calling either John Gutierrez or Frederick Hertz, local based attorneys who specialize in Real Estate Law.

It is an owner's obligation to inform tenants the property is in default, and there is the question of whether it is legal for the owner to continue to accept rent when they are not paying their mortgage. That is a problem for the bank to sort out. In terms of your situation, I would again strongly advise you to get legal help, and not rely strictly what realtors are telling you. A practical question for you- if you have a case against your landlord, that does not mean you are necessarily going to collect any money. This is someone who is in default. You may be able to stop paying rent, or put money in an escrow acct. for the bank. You need to get the full scoop from an attorney about LOCAL law, and protect yourself and know your options. Good luck.
0 votes Thank Flag Link Sat May 7, 2011
She is also a real estate agent, is this unethical? As well she asked me to leave next month, and what can I do to report this problem? I do not want her to do this to more people in other properties, since she knows how to abuse the system.
0 votes Thank Flag Link Fri May 6, 2011
Also, I guess you can really sue anyone for anything... But, I doubt you'll get anything from someone who's lost everything.
0 votes Thank Flag Link Fri May 6, 2011
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