I am assuming, based upon the context of the conversation, that your landlord was at some point in default (missed mortgage payments). As a result, the proeprty may have gone into foreclosure, after which it can then be sold. However, when the declaration of default on property that is subject to sale is cancelled, the notice based on such declaration of default must also be canceled, ie "cancelled default."
That is no guarantee that the property you are in is safe. As Ron stated, the borrower/landlord is not obligated to keep you informed of these matters. Although it would be the right thing to do in my opinion.
Your best bet is to try to keep a "safe" open dialogue with the landlord and let them know that in exchange for upfront information, you plan to continue paying, on time (which you are contractually bound to do). The risk of a tenant not paying is why some landlords don't tell the tenant what is occuring. In addtion, let them know that you would simply like to be prepared in the event the home doe foreclose or is listed in a short sale, so that you are able to move in a timely manner if needed.
In the link below is a guide to tenant and landlord rights for the state of California. It covers some of the issues concerning defaulted property and foreclosures.
Hope that helps.
Keisha Mathews, REALTORÂ®
CDPEÂ®, HRCÂ®, HAFAÂ® Certified
"SAR Masters Club Member 2012"
Mathews & Co. Realty Group
@ Century 21 Landmark Network
(916) 370-1803 cell