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Post-PTFA: California

Posted By USFN, Tuesday, May 5, 2015
Updated: Friday, September 25, 2015

May 5, 2015


by Charles E. Katz
Northwest Trustee Services, Inc.
USFN Member (California, Oregon)

The California Civil Code of Procedure (CCP) contains a framework that is essentially identical to the PTFA. Specifically, CCP § 1161b provides that a tenant/subtenant in possession of a rental housing unit under a month-to-month lease, or periodic tenancy at the time the property is sold in foreclosure, shall be given 90 days’ written notice to quit before the tenant/subtenant may be removed from the property. The section does not apply if any party to the note remains in the property as a tenant, subtenant, or occupant.

In addition to the rights mentioned above, tenants/subtenants holding possession of a rental housing unit under a fixed-term residential lease (entered into before transfer of title at the foreclosure sale) shall have the right to possession until the end of the lease term, and all rights and obligations under the lease shall survive foreclosure, except that the tenancy may be terminated upon 90 days’ written notice to quit if any of the following conditions apply:

• The purchaser or successor in interest will occupy the housing unit as a primary residence.
• The lessee is the mortgagor or the child, spouse, or parent of the mortgagor.
• The lease was not the result of an arms-length transaction.
• The lease requires the receipt of rent that is substantially less than fair market rent for the property, except when the rent is reduced or subsidized due to a federal, state, or local subsidy law.

CCP § 1161b is currently slated to sunset on December 31, 2019.

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