(a) Notwithstanding Section 1161a, a tenant or 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 pursuant to Section 1162 before the tenant or subtenant may be removed from the property as prescribed in this chapter.

(b) In addition to the rights set forth in subdivision (a), tenants or 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 pursuant to subdivision (a) if any of the following conditions apply:

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Terms Used In California Code of Civil Procedure 1161b

  • Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • Mortgagor: The person who pledges property to a creditor as collateral for a loan and who receives the money.
  • Property: includes both personal and real property. See California Code of Civil Procedure 17
  • Spouse: includes "registered domestic partner" as required by §. See California Code of Civil Procedure 17
  • State: includes the District of Columbia and the territories when applied to the different parts of the United States, and the words "United States" may include the district and territories. See California Code of Civil Procedure 17
  • Will: includes codicil. See California Code of Civil Procedure 17

(1) The purchaser or successor in interest will occupy the housing unit as a primary residence.

(2) The lessee is the mortgagor or the child, spouse, or parent of the mortgagor.

(3) The lease was not the result of an arms’ length transaction.

(4) The lease requires the receipt of rent that is substantially less than fair market rent for the property, except when rent is reduced or subsidized due to a federal, state, or local subsidy or law.

(c) The purchaser or successor in interest shall bear the burden of proof in establishing that a fixed-term residential lease is not entitled to protection under subdivision (b).

(d)  This section shall not apply if any party to the note remains in the property as a tenant, subtenant, or occupant.

(e) Nothing in this section is intended to affect any local just cause eviction ordinance. This section does not, and shall not be construed to, affect the authority of a public entity that otherwise exists to regulate or monitor the basis for eviction.

(Amended by Stats. 2019, Ch. 134, Sec. 3. (SB 18) Effective January 1, 2020.)

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