New law: Landlords need to disclose foreclosures

State bill has passed in Legislature and is on its way to Gov. Jerry Brown's desk

If an apartment or home for rent is in danger of foreclosure, would-be renters could soon have the right to be told about it before signing a lease.

A bill that passed in the state Legislature and is on its way to Gov. Jerry Brown's desk for signature was proposed to Sen. Joe Simitian, D-Palo Alto, by a constituent -- another in a series of constituent-proposed laws from Sen. Simitian's annual "There Oughta Be a Law" contest.

Samantha James of San Jose came up with the idea about a year ago after having paid a security deposit to rent an apartment, only to discover two months after furnishing and moving into it that the building was in foreclosure proceedings, according to an Aug. 23 statement from Sen. Simitian's office.

"I'm glad that Sen. Simitian and the Legislature are standing up for renters," James stated.

"We can't forget that the foreclosure crisis affects not just homeowners, but renters, too," Sen. Simitian said in the statement. "Without some kind of notice, renters are at risk of having their homes yanked out from under them. This bill will help renters make fully informed decisions before they sign on the dotted line."

Debra Carlton, senior vice president of the California Apartment Association, said in the statement: "The bill is a common sense solution. It doesn't prohibit a landlord from renting a home; it simply requires the owner to ensure that the tenant has full disclosure about the rental home that is currently facing foreclosure."


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Posted by randy albin
a resident of Mountain View
on Aug 24, 2012 at 1:06 pm

there are so many horribly corrupt landlords out there. you would think that palo alto was shangri la. i grew up in palo alto and the bay area. these corrupt idiots can make your life a living hell. wish them well with their sadistic selves

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Posted by common sense
a resident of Downtown North
on Aug 24, 2012 at 1:13 pm

Common sense says landlord disclosures to tenants should be comparable in scope to home seller disclosure to buyers. I'm really surprised this wasn't already a law.

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Posted by Parent
a resident of Another Palo Alto neighborhood
on Aug 24, 2012 at 1:40 pm

Even if the home or apartment is foreclosed, the home can't be yanked out from under a tenant. The new owner (even banks) must honor any existing lease term. Even in the case of a month to month rental, the tenant would have 30 days notice. That is all they would have had in the first place under the original owner.

I'm not objecting to disclosure, but let's be realistic about existing lease terms.

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Posted by Perspective
a resident of Greater Miranda
on Aug 25, 2012 at 1:40 pm

Stupid, foolish law. As Parent posted: a foreclosure does not affect the tenant. They can not be kicked out,nor have their rent changed.

Good grief. It is nobody's business if there is a risk of foreclosure, because often we can avert that at the last minute.

Appallingly simplistic and useless law which serves no purpose other than to hurt the landlord who is trying to NOT foreclose by making it more difficult to rent out a space by scaring ( needlessly) potential renters.

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Posted by Jan
a resident of Downtown North
on Aug 25, 2012 at 3:44 pm

Do you really think they will be up front.

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Posted by Renting in Palo Alto
a resident of JLS Middle School
on Aug 29, 2012 at 5:41 pm

I currently rent in PA. The current law states that if a property is in foreclosure and it changes hands, IF the renter has a lease in place, that lease will be honored for the remainder of the lease. BUT, if the renter is month-to-month with no lease in place, the maximum time allowed to move is 60 days.

I was almost a victim of this very situation. The landlord did not tell me and continued to collect rent. My son came home one day to find a notice on the door, stating that the property was about to go on auction. I attend the auction and after two months of was cancelled. The landlord and the bank finally came to an agreement and the property was taken out of foreclosure.

I am still currently renting and living in the same place. Whew!

This is a great LAW...finally!

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Posted by Hmmm
a resident of East Palo Alto
on Aug 29, 2012 at 8:39 pm

Renting is correct. This is an important law.

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Posted by Diane
a resident of another community
on Sep 4, 2012 at 1:12 pm

I am a renter/lease on a forclosed home that sold on auction today. my landlord only informed me of this about 5 days ago. I am also disabled. I know I have possibly 90 or the end of my lease to survive here under California laws but what rights do the new owners have to come in to INSECT this place because its a real mess. Can anyone tell me anything here I cant find that info anywhere? Desperate for Help Antioch, Cali

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