I am living in a house, as a tenant, and the house is being sold at a trustee sale. First, what is a trustee

Asked by Aaron Slaight, Long Beach, CA Tue Aug 12, 2008

sale? Second, I have lived there for more than three years as a disabled individual. Third, I have my own phone line (and phone bill) Also the owner, or trustor as the literature states, lives in the house and we have a verbal agreement on monthly rentthat has now lasted for more thatn three years... Lastly, the house is in ill-repute and definitely not move-inable. How long do I have (the house is being sold on 8-14 and we (trustor and myself) do not communicate (separate lives) and she was surprised when the literature started flowing in and the name on all correspondence was being mailed to the trustee: Kelly Rossow I believe. Obviously, no one knows, except the trustor and myself that I am rentinhg half the house; besides all my bills and disablility payment. When it is past the sale date do I wait for an eviction notice, or something with my name on it, tostart moving? And if so, would there be any re-location money. Thank you for the help.

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Ute Ferdig, Agent, Newcastle, CA
Tue Aug 12, 2008
Hello Aaron. I am sorry to hear that you are in this unfortunate situation. I'll answer your questions in the order in which the appear in your post.

A trustee sale is essentially an auction at the court house and it's the final step of the foreclosure procedure. In CA, real estate loans are typically secured by a deed of trust and the borrower is known as the trustor. The trustee is holding title to the property for the lender and the deed of trust gives the trustee the authority to foreclose on the property without having to seek a court judgment when the borrower/trustor defaults on the loan payment. The CA foreclosure process starts with a notice of default and ends with the trustee sale.

Effective July 8, 2008, a tenant or subtenant in possession of a rental housing unit that has been sold through foreclosure is generally entitled to a 60-day written notice to quit. However, a borrower who remains on the property after foreclosure may be served a three-day notice to terminate. This law does not affect, among other things, rent-controlled properties with just-cause evictions. Effective September 8, 2008, the lender, trustee, or authorized agent posting a notice of sale must also post and mail a specified notice of a tenant’s right to a 60-day eviction notice from the new owner, unless other laws apply. This requirement to notify tenants of their rights applies to loans secured by residential real property where the borrower has a different billing address than the property address.

It is possible that the lender would prefer not having to go through the eviction process and it is also possible that you would not want to have an eviction on your record. The lender may very well be willing to offer you cash in exchange of you agreeing to voluntarily vacate the property by a certain day. Typically, they don't offer more than $1,500, but now that they have to give you at least 60 days notice, they may be willing to offer more as it would be beneficial to them if they could get the property on the market sooner. In the current market, the property values can easily drop 1 or 2% in 60 days and it would be cheaper for the bank to get the property on the market now than in 2 months. Anyway, that's just me thinking logically, but unfortunately banks don't seem to always make rationale decisions.

It's ironic that you as a tenant can stay in the house longer than your landlord (in theory anyway).

Good luck to you.
Ute Ferdig
1 vote
Jeremy Lehman, Agent, Garden Grove, CA
Tue Aug 12, 2008
A Trustee's Sale is s public auction that is open to all bidders and the property is usually awarded to the highest bidder who meets all the criteria set by the Trustee. The fact is, you are going to have to look for a new place to live. Stop paying rent. There will be a new owner soon. Lastly, you will most likely be served with a notice to vacate, and possibly a cash for keys deal, which is money for you to get out sooner. Start the process of getting your things together and getting utilities out of your name. Too many people in this situation are in denial about losing their residence.

Jeremy Lehman
Century 21 Beachside Realtors
http://www.LehmanHomes.net (start your home search here)
Web Reference:  http://www.LehmanHomes.net
2 votes
Benny Chavez, Agent, BELLFLOWER, CA
Wed May 27, 2009
The bank or person who becomes the owner of the property will ask you to vacate. They will then also decide if you give them a clean vacated property whether or not to do what is called a cash for keys. This maybe as little as $500 to the high that I have seen at $3500. Good luck in finding your new place. Craigslist is great for rentals. Here to help!
Web Reference:  http://www.bennychavez.com
0 votes
Shel-lee Dav…, Agent, Rolling Hills Estates, CA
Tue Aug 12, 2008

See my answer to your duplicate question and take action. There may be ways to buy time, however, you might have to move as early as this Friday. It is a shame when innocent renters lose their homes to foreclosure. I hope all works out for you.

Shel-lee Davis
Real Estate Consultant
RE/MAX Palos Verdes Realty
0 votes
John Hickey, Agent, La Crescenta, CA
Tue Aug 12, 2008
Hi Aaron,

First of all, Good Luck - you're in a difficult spot.

Now - we need to clarify some terms. There is a something know as a Trust Sale and a very different process called a Trustee Sale.

A Trustee Sale is the final step in the foreclosure process. The first step is a "Notice of Default"; the second is a "Notice of Sale"; and, the third is the actual Trustee Sale. At each of the first two steps a formal legal notice is posted at the property - the purpose of the posting is just such a situation as yours; an occupant who is unaware that a foreclosure is pending.

The "Notice of Default" is posted 90 days prior to the "Notice of Sale". The "Notice of Sale" is posted 21 days prior to the actual sale. So, if this is a foreclosure the first notice would have been posted about 4 months ago.

The other type of sale is a Trust Sale. It has rules quite similar to a probate sale and it is hard to say exactly what stage it might be at from your question.

Either way, the rules for a tenant are different than the rules for a roomate. From what you've said it sounds like your situation would be treated as a roomate. If you don't think you can move at the time you are asked to move you should get legal advice on your options as soon as possilbe.

John Hickey
Dilbeck Realtors, GMAC
0 votes
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