Existing law, until January 1, 2013, requires that a resident of property subject to foreclosure pursuant to a notice of sale under a mortgage or deed of trust be provided a specified notice advising the resident that, among other things, if the person is renting the property, the new property owner may either give the tenant a new lease or rental agreement, or provide the tenant with a 60-day eviction notice, and that other laws may prohibit the eviction or provide the tenant with a longer notice before eviction.

This legislation revises certain portions of the notice to instead require a resident of property upon which a notice of sale has been posted to be advised that if the person is renting the property, the new property owner may either give the tenant a new lease or rental agreement, or provide the tenant with a 90-day eviction notice.

The bill provides tenants or subtenants holding possession of a rental housing unit under a fixed-term residential lease entered into before transfer of title at the foreclosure sale the right to possession until the end of the lease term except in specified circumstances (including if the new owner will occupy the property as a primary residence, or if the lease was signed within the last 15 days). A tenant or subtenant in possession of a rental housing unit under a month-to-month lease at the time that property is sold in foreclosure must be provided 90 days’ written notice to quit before the tenant or subtenant may be removed from the property.

The legislation further requires a residential lease that is entered into 75 days or more after a notice of default against the property has been recorded to contain a notice to advise the potential tenant that the foreclosure process has begun on the property, and that the property may be sold, which may terminate the lease.

The new law extends the operation of these provisions until December 31, 2019.

Existing law provides, that in an unlawful detainer action, if an owner has obtained service of a prejudgment claim of right to possession, no occupant of the premises (whether or not that occupant is named in the judgment for possession), may object to the enforcement of the judgment. This legislation provides that in any action for unlawful detainer resulting from a foreclosure sale of a rental housing unit pursuant to specified provisions, the foregoing provisions regarding objection to the enforcement of a judgment do not limit the right of a tenant or subtenant to file a prejudgment claim of right of possession or to object to enforcement of a judgment for possession, regardless of whether the tenant or subtenant was served with a prejudgment claim of right to possession.

Enacted September 2012. Link to bill: http://www.leginfo.ca.gov/pub/11-12/bill/asm/ab_2601-2650/ab_2610_bill_20120925_chaptered.pdf