Tenant rights during a landlord’s foreclosure in California are stronger than most people expect. You keep paying rent under your existing lease until title actually transfers, the new owner must give you at least 90 days’ written notice before you can be required to move, a bona fide fixed-term lease generally survives the sale, and if you have lived in the unit at least 12 months, just cause eviction law often blocks removal on the basis of the foreclosure alone. Federal law, state statute, and local ordinances all stack on top of each other here, and none of them care that your former landlord defaulted on the mortgage.
Who You Pay Rent To Before and After the Sale
Your rent obligation does not pause because a foreclosure is pending. Civil Code Section 2924.8 requires that the notice posted for residents state plainly that “all rights and obligations under your lease or tenancy, including your obligation to pay rent, will continue after the foreclosure sale.”1California Legislative Information. California Code, Civil Code CIV 2924.8 – Notice of Foreclosure Sale to Residents Until the trustee’s sale closes and title actually transfers, your existing landlord is still your landlord. Keep paying on schedule.
After the sale, be careful about who you write the next check to. Ask for a copy of the recorded Trustee’s Deed Upon Sale before redirecting any payment. That document is proof that ownership actually changed hands. A letter or a phone call from someone claiming to be the new owner is not enough. A legitimate purchaser will send written notice identifying themselves, giving you an address for rent, and telling you where your security deposit is being held.
Do not withhold rent while you sort this out. Tenants who stop paying because they aren’t sure who owns the building often end up defending unlawful detainer actions they should have avoided. If you genuinely can’t confirm the new owner, set the rent aside in a separate account and produce it the moment ownership is verified. Keep a paper record of every payment and every communication.
The 90-Day Notice From the New Owner
Once title transfers, the new owner cannot just tell you to leave. Code of Civil Procedure Section 1161b requires at least 90 days’ written notice to a month-to-month or periodic tenant before an unlawful detainer can proceed, served through the formal methods in Section 1162.2California Legislative Information. California Code of Civil Procedure CCP 1161b
The federal Protecting Tenants at Foreclosure Act, made permanent in 2018, independently requires any successor in interest to give a bona fide tenant at least 90 days’ notice.3Office of the Law Revision Counsel. 12 USC 5220 – Assistance to Homeowners A 30-day or 60-day notice of the kind used in ordinary landlord-tenant situations is not valid after a foreclosure sale. If you receive one, it is legally defective.
Fixed-Term Leases Usually Survive the Sale
If your lease has a set term, such as a 12-month agreement, the new owner generally has to honor it through the end of that term. Both CCP 1161b and the federal act protect fixed-term tenants with all existing lease terms intact.2California Legislative Information. California Code of Civil Procedure CCP 1161b The purchaser steps into the shoes of the old landlord and inherits both sides of the deal.
There are four exceptions. The new owner can override a fixed-term lease with 90 days’ written notice if the purchaser will occupy the unit as a primary residence; if the tenant is the former borrower or that borrower’s spouse, parent, or child; if the lease was not an arms-length transaction because of a personal relationship between the tenant and the former landlord; or if the rent is substantially below fair market value and the discount is not the result of a government subsidy. These are the “bona fide” lease tests, and the burden of proving your lease fails one of them sits with the new owner.3Office of the Law Revision Counsel. 12 USC 5220 – Assistance to Homeowners A lease signed before the foreclosure, at a normal rent, with someone you had no personal tie to, qualifies.
Just Cause Protections Under AB 1482
The 90-day notice runs out. Just cause eviction law is where longer-term security comes from. Civil Code Section 1946.2, enacted by the Tenant Protection Act of 2019, prohibits a landlord from terminating a covered tenancy without a listed just cause once the tenant has been in the unit at least 12 months.4California Legislative Information. California Civil Code 1946.2 Foreclosure is not on that list. A new owner who bought at a trustee sale cannot use the sale itself as grounds to evict a protected tenant.
The statute splits just cause into at-fault reasons (nonpayment of rent, lease violations, criminal activity on the property, refusing legally required entry) and no-fault reasons (owner move-in, withdrawal from the rental market, government order to vacate). A new owner who genuinely intends to move in can pursue a no-fault termination, but must pay relocation assistance equal to one month’s rent within 15 calendar days of serving the notice.5California Legislative Information. California Code CIV 1946.2
Which Properties AB 1482 Covers
The single-family exemption is where many foreclosed tenants get tripped up. A single-family home or condo is exempt from just cause only if two conditions are both met: the owner is not a corporation, real estate investment trust, or an LLC with a corporate member, and the tenant received specific written notice that the property is exempt from Sections 1946.2 and 1947.12.4California Legislative Information. California Civil Code 1946.2 When a bank or an investment fund is the new owner, that entity is corporate and cannot claim the exemption. The property that was exempt under a mom-and-pop owner may no longer be exempt after the sale.
Other exemptions include housing with a certificate of occupancy issued within the previous 15 years on a rolling basis, owner-occupied duplexes where the owner lived in one unit at the start of the tenancy, and certain affordable housing. Section 1161b explicitly does not override local just cause ordinances, so tenants in Los Angeles, San Francisco, Oakland, and other rent-controlled jurisdictions should check local rules, which often provide stronger protection than state law.2California Legislative Information. California Code of Civil Procedure CCP 1161b
Illegal Lockouts
Inexperienced buyers sometimes try to skip the legal process. They change locks, shut off water or power, remove doors, or move belongings to the curb. Every one of those acts is illegal in California no matter who owns the building.
Civil Code Section 789.3 prohibits any landlord from intentionally cutting off utilities or blocking access by changing locks, removing doors or windows, or taking a tenant’s personal property without written consent. A tenant can recover actual damages plus up to $100 for each day the violation continues, with a minimum award of $250 per violation, and the court must award attorney’s fees to the prevailing tenant. Each repeated violation is a separate cause of action.6California Legislative Information. California Civil Code 789.3
If it happens to you, photograph and video everything, report the lockout to police, and contact a legal aid organization. You can also ask a court for an emergency order restoring your access and utilities while any proper eviction plays out on the correct legal track.
Cash-for-Keys Offers
Many banks and investors prefer to pay tenants to leave rather than litigate. Cash-for-keys offers typically run from about $2,000 to $20,000, depending on the property, the market, and how much leverage the tenant actually has. If your fixed-term lease is bona fide and AB 1482 applies, the buyer is facing months of process with no guarantee of winning, and that reality should shape what you accept.
A workable agreement is written and covers the payment amount, the move-out date, the condition the unit must be in at hand-over, how and when payment is delivered, and a mutual release. Insist on payment before or at the same moment as the keys change hands, by cashier’s check or wire. Never accept a promise of later payment. If the amount is over $600, ask whether the new owner will issue a 1099-MISC so you can plan for the tax hit. You are not required to take any offer.
If You Have a Section 8 Voucher
Housing Choice Voucher tenants have an extra layer. The new owner takes title subject to both your lease and the Housing Assistance Payments contract between the housing authority and the previous landlord.7California Courts. Tenants Rights in a Foreclosure The buyer cannot refuse to participate in the voucher program during the remaining lease term. If the buyer plans to occupy the unit, the 90-day notice still applies. Tell your local housing authority as soon as you learn about the foreclosure so they can help you coordinate or port the voucher.
Getting Your Security Deposit Back
Under Civil Code Section 1950.5, the previous landlord and the new owner are jointly and severally liable for your deposit.8California Legislative Information. California Civil Code 1950.5 Either can be pursued for the full amount. The new owner cannot avoid the obligation by claiming they never received the funds from the former landlord.
Once you vacate, whoever holds the landlord’s position has 21 calendar days to return the deposit or send an itemized statement with receipts for any deductions. Allowable deductions are limited to unpaid rent, cleaning, and repairs beyond normal wear and tear. Retaining any portion in bad faith exposes the landlord to statutory damages of up to twice the deposit amount, on top of what you are actually owed.8California Legislative Information. California Civil Code 1950.5
Practically speaking, the former landlord who just lost the property is often judgment-proof. Direct your written demand to the new owner at the recorded address, keep a copy, and file in small claims court if 21 days pass without a proper response.