We have won a bid on a house in Berkeley, which we have been told is about to go into foreclosure. The

Asked by D, Berkeley, CA Wed May 6, 2009

seller is off property, the tenants are renters who have not paid rent since Dec 08' They have been served an eviction notice, but have not left property yet. Do we have any legal recourse in terms of getting them out of the property? What are our legal rights if we have already gone into escrow?

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Pacita Dimac…, Agent, Oakland, CA
Wed May 6, 2009
Although you are now into escrow, you still have a chance to back out and get your deposit back if you haven't already released your contingencies.

One of your contingencies is buyer investigation period --- and during this time, besides getting an appraisal and getting a loan approved, you can use this to get inspections done, and also to research the rent control issue.

If you specified on the contract that the property will be delivered vacant by close of escrow, and the seller agreed to that condition, it is the seller's responsibility to make that happen. The sellers can offer the tenants "cash for keys" to vacate the property. But if the seller cannot guarantee that, then you are buying yourself a massive headache before you even move in.

Even if you didn't specify that the property should be delivered vacant. you can use the buyer investigation period to guide you in which direction you would like to proceed.

Good luck
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Liz Stevens, , Berkeley, CA
Wed May 6, 2009
I would say you should go down, in person, to the Berkeley Rent Arbitration Board office on Milvia and Addison Streets and have one of their attorneys counsel you as to your rights and responsibilities. I think Cameron is correct, but get it from the Rent Board so you know where you will stand should your purchase go through. Was the price enough to cover the seller's loan payoff and all other seller's obligations? Have your agent work with the title officer to figure out all the encumbrances on the loan and what the total payoff is to the lender(s) involved. all the best.
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Cameron Platt, Agent, Oakland, CA
Wed May 6, 2009
This is an increasingly common scenario, in which tenants learn that the property they are renting is going into foreclosure and that they will eventually be evicted, so they stop paying rent.

Unless your purchase contract states that the property is to be delivered vacant, you may be stuck purchasing the property subject to "tenants rights." It is extremely difficult to get rid of uncooperative tenants, especially in Berkeley and Oakland.

If you are uncomfortable purchasing a property and then fighting with the tenants to evict them, you may be able to cancel the contract per your inspection contingency.

Regardless, you would be well-advised to speak with an attorney about this matter -- it will be worth the legal fee you incur to learn all of the options that are available to you. Rest assured that the tenants will do whatever they can to keep living in the house without paying rent. Unfortunately for you, there are many very effective pro bono attorney services in the area that will help the tenants.

I would be happy to provide you with names of very competent landlord-side attorneys if you would like to speak to one.

Best regards,
Cameron Platt, JD, CRS
Platt Inc. Real Estate
(510) 261-1661
Web Reference:  http://www.plattinc.com
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