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Entries in california landlord tenant law (9)

Wednesday
Nov212012

2013 California Tenant Law - Landlord Obligations Upon Foreclosure (AB 2610)

Corporate Litigation Lawyer Los AngelesBusiness Litigation  

 

Paul C. Bauducco
818.907.3245

 

Governor Jerry Brown signed Assembly Bill 2610 in September, a California landlord tenant law which gives current renters more time to stay at a property when a landlord is undergoing foreclosure.

The new law will bring the state more in line with federal law regarding protecting tenants on foreclosed properties. (Senate Bill 1191 is the bill we discussed in my last blog, Responsibilities of Landlord in Default and Foreclosure, which addresses notices to prospective tenants. You may also want to read Seven New Laws in Effect January 1st, for an overview of other legislative changes affecting California property owners and managers.)

AB 2610 amends the Civil Code (section 2924.8) and the Code of Civil Procedure (sections 415.46 and 1161b). When a Notice of Sale is posted on a property, the new owner must post a notice in the same manner which informs tenants of protections available to them.

Landlords must notify tenants that:

1. If they are month to month tenants, the new owner must give them a new lease or rental agreement, or give them 90 days notice before evicting them.

2. If they have a fixed term lease, the new owner must honor the lease, unless:

a.  The new owner will occupy the property as his/her primary residence. 

b.  The tenant is the mortgagor, or the child, spouse or parent of the mortgagor. 

c.  The lease was not the result of an arms’ length transaction. 

d.  The rent is well below fair market excluding any federal, state or local rent control laws.

Landlord Responsibilities After a Notice of Default

 

While SB 1191 pertains to landlords who provide single-family, or four or fewer units in a multi-family dwelling, AB 2610 is broader, having no limitations on residence size.

The law will become operative on March 1, 2013 and will remain in effect until December 31, 2019.

One more thing:

Existing law permits the buyer of the foreclosure property to use a prejudgment claim of right of possession against a holdover former owner.

Assembly Bill 2610 specifically states that this existing law will not limit the rights of the tenant to also file a prejudgment claim of right of possession before judgment. Moreover, the tenant may also object to enforcement of a judgment for possession whether or not the tenant was served with the claim of right to possession.

 

Paul C. Bauducco is the Chair of the Business Litigation Practice Group at our firm. Contact him via email if you have any questions regarding construction defects, landlord tenant laws or real estate litigation: pbauducco@lewitthackman.com.

 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.
Wednesday
Nov072012

California Landlord Tenant Law – Responsibilities of Landlord in Default and Foreclosure (SB 1191)

Corporate Litigation Lawyer Los AngelesBusiness Litigation Paul C. Bauducco
818.907.3245

 

New California landlord tenant laws go into effect in 2013 for rental property owners facing foreclosure.

Senate Bill 1191 was signed into law by Governor Jerry Brown in September, adding Section 2924.85 to the Civil Code. (Read about other new laws for landlords, housing associations, and property managers in last week's blog, Seven New Laws in Effect January 1st.)

 

Notice of Default - California Civil Code Section 2924.85
(Effective January 1, 2013)

 

If you provide single-family homes or multi-family dwellings of four or fewer units for rent and have received a notice of default for a mortgage or deed of trust for the property, you are required to provide written notice – in English and other languages per California Civil Code Section 1632 – of that default to any prospective tenants.

In your notice to a prospective tenant, you must disclose that the property may be sold in foreclosure and that the tenant may, or may not be forced to move in the future.

You should also state that a new landlord or property owner must honor the lease unless the new owner chooses to occupy the property as a primary residence or if there is a "Just Cause for Eviction Law" applicable in your city.

If you are buying a rental property in a foreclosure sale, you'll need to provide the tenants with a 90 day notice of eviction if you plan to evict.

 

Penalties for Violating Section 2924.85

 

Section 2924.85 provides for certain tenant rights in the event a landlord fails to give the required notice, including:

  1. Allowing the tenant to void the lease and recover the greater of one month’s rent or twice the actual damages suffered; or

  2. If a foreclosure has not occurred, allowing the tenant to elect not to terminate the lease, but to deduct an amount due to the landlord equal to one month’s rent.

 

Foreclosure Notice - California Civil Code Section 2924.8
(Effective March 1, 2013)

 

As a property owner, you should direct your managers to deliver written notices of foreclosure to existing tenants in writing.  The exact language for the Notice is set forth in Section 2924.8, including notice that:

  1. Landlord LawForeclosure has begun which may affect the tenant’s right to continue to live in the property.

  2. The property may be sold 20 days or more after the date of the notice.

  3. The new property owner may give the tenant a new lease or provide the tenant with a 90 day eviction notice.

  4. The tenant may have the right to stay in the property longer than 90 days if he/she has a fixed term lease, which the new owner must honor, unless the new owner will occupy the property as a primary residence.

  5. In some cases and in some cities, where there is a “just cause for eviction law”, the tenant may not have to move out.

  6. The tenant may wish to contact a lawyer or legal aid office to discuss his/her rights.

Paul C. Bauducco is a Construction Defect and Real Estate Litigation Attorney at our Firm. He is also the Chair of the Business Litigation Practice Group. Contact him via email: pbauducco@lewitthackman.com.

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.
Wednesday
Oct312012

California Landowners & Managers: 7 New Laws in Effect January 1st

Corporate Litigation Lawyer Los AngelesCommercial Real Estate Litigation  

 

Paul C. Bauducco
818.907.3245

 

Whether you own private or commercial rental property, serve as a member of a housing association, are a California realtor, or just have an interest in buying, selling or leasing property, take note:

With the New Year come new rules regarding your real estate.

Hopefully you are already in compliance with the new laws Governor Jerry Brown signed this past legislative season. If not, there are some important property ownership and management laws you should be ready for on January 1st.

 

2013 Common Interest Development & HOA Laws

 

Assembly Bill 1838 amends the Davis-Stirling Common Interest Development Act,  which regulates common interest developments like apartments, condos, townhouse developments and stock cooperatives.

1.  Cancellation Fees: HOAs won't be able to collect cancellation fees for HOA sales disclosure documents under AB 1838 if the cancellation is requested in writing, and if the work on the order has not yet been fulfilled, or if the HOA has already been compensated for that work.

2.  Davis-Stirling Simplified: The Act has also been reorganized. Assembly Bill 805 (the bill relocates the Act to a different part of CA Civil Code) doesn’t go into effect until January 1, 2014, so HOAs won't have to change governing documents to reflect the move until the end of 2013.

 

New Laws for Landlords & Property Managers

 

If you own or manage apartments, townhouses or space in an RV park, these new California landlord tenant laws apply to you:

3.  Notice of Default: Landlords must disclose written notice of default under any mortgages or deeds of trust on rental properties to any prospective tenants, if renting properties containing one to four residential units, before signing a lease agreement. Under Senate Bill 1191, the tenant may void the lease and recover either one month's rent or twice the amount of damages and all prepaid rent should a landlord fail to provide notice.

4.  Foreclosure Notice: Month-to-month tenants must be given a written 90 Day Notice to Terminate a rental unit when a property is foreclosed. If a tenant still has a fixed-term lease, generally the tenant can remain until the end of the term, under Assembly Bill 2610

5.  Mobile Home Owner Rights: Per Assembly Bill 2150, managers or owners of mobile home parks must provide a specified notice in the rental agreement for space, before February 1st of each year, starting in 2013. The notice sets forth rights and responsibilities of the mobile home owner, including a 90 day notice of a rent increase.

6.  Abandoned Property: When a tenant quits the premises and leaves behind personal property, the landlord must sell the abandoned property at public auction if it is worth $700 (formerly $300) or more, per Assembly Bill 2521.

7.  Animal Control: Landlords who allow tenants to keep pets cannot require tenants to have their pets declawed or devocalized as a condition of occupancy, per SB 1229.

These are just some of the California real estate laws affecting landlord-tenant relations and home owner associations in 2013. Please feel free to contact me if you have any questions regarding real estate or construction law.  A better understanding of the law can prevent problems and litigation.

Paul C. Bauducco is the Chair of our Business Litigation Practice Group. You may reach him via email: pbauducco@lewitthackman.com.

 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.
Tuesday
May012012

Another Blow for Property Owners Challenging Foreclosure

Business LitigationReal Estate Litigation Attorney

by Nicholas Kanter
818-907-3289

When challenging a foreclosure sale, property owners look to defects or irregularities in the foreclosure process, which is strictly regulated by California’s Civil Code, to have the sale enjoined or rescinded.  Recently, one section of the Civil Code has received a lot of attention.

Civil Code Section 2932.5 requires the assignee of a mortgage to record the assignment prior to exercising a power to sell real property.  Parties have relied on this section to challenge foreclosure sales where a deed of trust is assigned, but not recorded, until after the sale. 

California case law, dating back to 1908, established that the predecessor statute to section 2932.5 (section 858) applies only to mortgages, not deeds of trust (Stockwell v. Barnum). 

However, federal and state courts have recently disagreed over the application of Section 2932.5 to deeds of trust.  On the federal side, e.g., Tamburri v. Suntrust Mortgage, Inc., (2011), and In re Cruz (2011), courts have applied Section 2932.5 to deeds of trust.  On the state side, the court in Calvo v. HSBC Bank USA, N.A. (2011), followed the Stockwell decision.

In support of Stockwell and Calvo, the Court of Appeal in Haynes v. EMC Mortgage Corp., (filed April 9, 2012, publication ordered April 24, 2012) found that Section 2932.5 does not apply to deeds of trust.  The Haynes court rejected Haynes’ reliance on the federal decisions finding:

We of course, are not bound by federal decisions on matters of state law…While our Supreme Court has noted in passing on issues other than the interpretation of section 2932.5, that “a deed of trust is tantamount to a mortgage with a power of sale” [citation], the court has not addressed section 2932.5 and the statute, by its plain terms, does not apply to deeds of trust.  

The court also explained why section 2932.5 applies to mortgages but not deeds of trust:

Section 2932.5 requires the recorded assignment of a mortgage so that prospective purchaser knows that the mortgagee has the authority to exercise the power of sale.  This is not necessary when a deed of trust is involved, as the trustee conducts the sale and transfers title. 

The Haynes decision, along with the holding in Calvo, reinforces long-standing California case law that Civil Code Section 2932.5 does not apply to deeds of trust, thus all but taking away a party’s ability to challenge a non-judicial foreclosure sale based on an unrecorded assignment.  

Nicholas Kanter is a Business Litigation Attorney in our Real Estate Practice Group. Contact him via e-mail: nkanter@lewitthackman.com.




 
Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

 

 

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