Foreclosure sale

[ramjet430]

What is the name of your state (only U.S. law)? CA
My son is renting a room in a condo in Los Angeles with two other people. One of them is the owners nephew. The owner of the condo has gone through foreclosure and has sold (yesterday, 12/7). The new owners are asking them to leave in 2 weeks and they will be paid $1,500 for leaving by then. I am not sure of the new laws concerning this issue. When do they HAVE TO move out? Do they pay rent to the new owners and how is that amount agreed upon?

 

[Who's Liable?]

What is the name of your state (only U.S. law)? CA
My son is renting a room in a condo in Los Angeles with two other people. One of them is the owners nephew. The owner of the condo has gone through foreclosure and has sold (yesterday, 12/7). The new owners are asking them to leave in 2 weeks and they will be paid $1,500 for leaving by then. I am not sure of the new laws concerning this issue. When do they HAVE TO move out? Do they pay rent to the new owners and how is that amount agreed upon?

Per federal law, new owners MUST give a MINIMUM of 90-days notice for existing tenants to vacate IF they plan to reside there themselves. The tenants MUST continue paying rent during this time to the new owners.

However if the new owners want to give an incentive to vacate early, they certainly can. Make sure that your son gets it in WRITING!.

Also, the existing security deposit MUST be transferred to the new owners as well. Follow the normal procedure for vacating the unit by providing a forwarding address as well as a request for the security deposit.

 

[DeenaCA]

For information on the federal Protecting Tenants at Foreclosure Act (Title VII, PL 111-22), see NLIHC: Renters in Foreclosure Toolkit. Under this law, tenants in foreclosed residential properties are generally entitled to a minimum 90 day notice period before they must vacate the property. If a fixed-term lease is in effect, the tenants may remain through the end of the term unless the new owner intends to occupy the property as his/her primary residence.

Only "bona fide" tenants are protected under the Act. To meet the definition of bona fide tenancy:

(1) the mortgagor or the child, spouse, or parent of the mortgagor under the contract is not the tenant;
(2) the lease or tenancy was the result of an arms-length transaction; and
(3) the lease or tenancy 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 a Federal, State, or local subsidy.

You stated that one of the roommates is the owner's nephew. If the rent was below market pending the foreclosure, the federal protections may not apply.

Of course, the tenants are free to accept "cash for keys" in lieu of remaining in the unit. It's the tenants' choice.

Do they pay rent to the new owners and how is that amount agreed upon?

If the federal law is applicable and the tenants remain in the condo, they would pay the same amount of rent they paid prior to the foreclosure. They must continue to pay rent or the new owners can evict for nonpayment under applicable state law.