Your Landlord Got Foreclosed: Tenant Rights When the Bank Takes Over

Foreclosure ends the landlord, not the tenancy. Federal and state law give bona fide tenants notice periods, lease protections, and defenses against the new owner’s rush to empty the building.

What California Law Says

The federal Protecting Tenants at Foreclosure Act requires new owners after foreclosure to honor bona fide leases to term in most cases, or provide 90 days notice for month-to-month tenancies; California Code of Civil Procedure section 1161b mirrors the 90-day floor. AB 1482 just cause and local ordinances continue to apply where covered.

How to Protect Yourself, Step by Step

1. Keep paying rent — to the new owner once ownership is documented — and keep proof; nonpayment hands them the easy case.
2. Demand the new owner’s identity and where to pay in writing; confusion is not your default.
3. Assert your lease term or the 90-day minimum against any shorter demand.
4. Check just-cause coverage; foreclosure is not itself a just cause under many regimes.
5. Negotiate cash for keys from strength — banks pay for clean, fast, voluntary exits.

Common Questions

The bank’s agent says I have 3 days to leave. True?

Not for a bona fide tenant — 90 days is the floor, a valid lease often runs to term, and a 3-day notice to a paying tenant after foreclosure is defective.

My deposit was held by the foreclosed landlord. Who owes it back?

Deposit obligations transfer with the property under California law — pursue the successor owner, and keep records of the old landlord for the alternative claim.