Firm Commentary:  Beginning January 1, 2013, a new California law takes effect that provides additional protections for tenants from LANDLORDS renting properties in foreclosure by mandating disclosure and imposing damages and penalties.  

 

Key points:

  1. 1.      Requires every landlord who offers for rent a single-family dwelling, or a multifamily

dwelling not exceeding 4 units, and who has received a notice of default (NOD) that has not been rescinded with respect to a mortgage or deed of trust secured by that property to disclose the notice of default in writing to any prospective tenant prior to executing a lease agreement for the property,

 

  1. 2.      Violation of those provisions would allow the tenant to void the lease and entitle the tenant to recovery of one month’s rent or twice the amount of actual damages from the landlord, and all prepaid rent, if the tenant voids the lease and vacates the property,

 

  1. 3.      Provides that if the tenant elects not to void the lease and the foreclosure sale has not yet occurred, the tenant may deduct a total amount equal to one month’s rent from future rent obligations.
  2. 4.      Property managers can be liable if they fail to deliver the required notice after they are informed by the landlord.

 

 

http://www.leginfo.ca.gov/pub/11-12/bill/sen/sb_1151-1200/sb_1191_bill_20120823_enrolled.pdf

 

Senate Bill No. 1191

Passed the Senate August 22, 2012

Secretary of the Senate

Passed the Assembly August 20, 2012

Chief Clerk of the Assembly

This bill was received by the Governor this day

of , 2012, at o’clock m.

Private Secretary of the Governor

CHAPTER

An act to add and repeal Section 2924.85 of the Civil Code,

relating to landlord-tenant relations.

legislative counsel’s digest

SB 1191, Simitian. Landlord-tenant relations: disclosure of

notice of default.

Existing law generally regulates the hiring of real property,

including, among other things, specifying certain obligations

imposed on landlords and obligations imposed on tenants. Existing

law, until January 1, 2013, requires a tenant of property upon which

a notice of sale has been posted to be provided a specified notice

advising the tenant that, among other things, 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 bill would, until January 1, 2018, require every landlord

who offers for rent a single-family dwelling, or a multifamily

dwelling not exceeding 4 units, and who has received a notice of

default that has not been rescinded with respect to a mortgage or

deed of trust secured by that property to disclose the notice of

default in writing to any prospective tenant prior to executing a

lease agreement for the property. The bill would provide that a

violation of those provisions would allow the tenant to void the

lease and entitle the tenant to recovery of one month’s rent or twice

the amount of actual damages from the landlord, and all prepaid

rent, if the tenant voids the lease and vacates the property in

addition to any other remedies that are available. The bill would

also provide that if the tenant elects not to void the lease and the

foreclosure sale has not yet occurred, the tenant may deduct a total

amount equal to one month’s rent from future rent obligations

owed the landlord who received the notice of default. The bill

would specify the content of the written disclosure notice, and

would require the notice to be provided in English and other

languages, as specified. The bill would exempt a property manager

from liability for failing to provide the written disclosure notice

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SB 1191 – 

unless the landlord notified the property manager of the notice of

default and directed him or her in writing to deliver the written

disclosure.

The people of the State of California do enact as follows:

SECTION 1. Section 2924.85 is added to the Civil Code, to

read:

2924.85. (a) Every landlord who offers for rent a single-family

dwelling, or a multifamily dwelling not exceeding four units, and

who has received a notice of default that has not been rescinded

with respect to a mortgage or deed of trust secured by that property

shall disclose the notice of default in writing to any prospective

tenant prior to executing a lease agreement for the property subject

to the notice.

(b) A violation of subdivision (a) shall void the lease at the

election of the tenant and shall entitle the tenant to recovery of one

month’s rent or twice the actual damages, whichever is greater,

and all prepaid rent from the landlord who received the notice of

default, in addition to any other remedy that the law may provide.

(c) In lieu of the remedies in subdivision (b), if the tenant elects

not to terminate the lease and the foreclosure sale has not occurred,

the tenant may elect to deduct a total amount equal to one month’s

rent from future rent obligations owed the landlord who received

the notice of default.

(d) The written disclosure notice required by subdivision (a)

shall be provided in English and the languages described in Section

1632 substantially in the following form:

The foreclosure process has begun on this property, and this

property may be sold at foreclosure. If you rent this property, and

a foreclosure sale occurs, the sale may affect your right to continue

to live in this property in the future. Your tenancy may continue

after the sale. The new owner must honor the lease unless the new

owner will occupy the property as a primary residence, or in other

limited circumstances. Also, in some cases and in some cities with

a “just cause for eviction” law, you may not have to move at all.

In order for the new owner to evict you, the new owner must

provide you with at least 90 days’ written eviction notice in most

cases.

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– – SB 1191

(e) A property manager shall not be liable under this section for

failure to provide the written disclosure notice in subdivision (d)

unless the landlord has notified the property manager of the notice

of default and directed him or her in writing to deliver the written

disclosure, in which case the property manager shall be liable to

the extent specified in subdivision (b). This subdivision shall not

preclude a landlord from being held liable when a tenant does not

receive the written disclosure notice in subdivision (d).

(f) The rights and remedies provided by this section are in

addition to and independent of any other rights and remedies under

any other law. Nothing in this section shall be construed to alter,

limit, or negate any other rights and remedies.

(g) This section shall remain in effect only until January 1, 2018,

and as of that date is repealed, unless a later enacted statute, that

is enacted before January 1, 2018, deletes or extends that date.

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SB 1191 – 

 

 

 

Approved , 2012

Governor

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