New state law affects homeowners, renters
Consumers get more protections as number of foreclosures rise in Los Angeles County and all across California
California’s state government recently signed into a law a bill which helps homeowners and renters who are involved in a foreclosure. SB 1137 makes four changes to current state law affecting consumers. The changes are effective until Jan. 1, 2013.
Renters get a 60-day notice
If you rent a home that someone buys in a foreclosure, you must receive a 60-day notice to move out, instead of just 30.
This rule does not apply to multi-family residences, or if the landlord lives on the property.
You must keep up vacant property
If you buy a property at a foreclosure sale and it remains vacant, you must keep the property in good shape. If after a 30-day warning you do not clean up the property, a government agency can fine you $1,000 a day.
Lenders must warn you before starting foreclosure
If you are a homeowner potentially facing foreclosure, lenders must reach out to you before they can send a Notice of Default.
First, lenders must call you by telephone or reach you in person. They have to offer to set up a meeting to discuss your financial situation within 14 days.
If they can’t reach you, they must try to reach you by:
- Sending a letter to you.
- Making at least three telephone calls on three days at three times.
- Sending a certified letter to you.
The lender does not have to follow these steps if you:
- Surrender the property,
- File bankruptcy, or
- Hire an advisor who helps people avoid their debts.
Lenders must announce the sale
Letter to tenants
These exact words must be posted and mailed to tenants in a foreclosure:
“Foreclosure process has begun on this property, which may affect your right to continue to live in this property. Twenty days or more after the date of this notice, this property may be sold at foreclosure. If you are renting this property, the new property owner may either give you a new lease or rental agreement or provide you with a 60-day eviction notice. However, other laws may prohibit an eviction in this circumstance or provide you with a longer notice before eviction. You may wish to contact a lawyer or your legal aid or housing counseling agency to discuss any rights you may have.” |
When a lender gets close to a foreclosure sale, they must tell tenants about the sale with two forms.
- The Notice of Sale
- A brief letter that describes to renters some of their rights. (see box)
They must post these forms at the home for at least 72 hours. They must also mail the forms to the home’s address.
For more information, contact our Real Estate Fraud and Information Division at (800) 973-3370.
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