Finding a foreclosure notice tacked on to their door means trying to find someone to answer a lot of questions.
Recently, Tenants Together, California's Statewide Organization for Renters' Rights issued their findings that at least one-third of all foreclosures are rentals.
However, the percentage might be even higher because many homes that are rental units are being reported as owner-occupied in their documentation.
"The custom data from foreclosure radar tracking aggregates all the information from counties in California," says Dean Preston, Executive Director of Tenants Together. "In our recent report we make the point that the number is probably higher."
That is because owners may not be listing the property as a rental in documentation.
"The determination of owner-occupied is based on a homeowner's exemption, Preston added. "The presumption is that they are occupying the property. However, when people call us and we look it up, a shocking number are coming back as owner-occupied."
Preston said there could be a lot of reasons the landlords are saying they live in the property.
Some owners may have moved out of first homes to better homes and never told anyone they are now renting the property. They qualify for income tax exemptions when a property is sold is another reason. Preston said that owner-occupied home loans means the buyer qualifies for a better rate than if they said it was an investment property.
Data collected from the Tenant Foreclosure Hotline revealed that 62 percent of renters surveyed live in properties incorrectly listed as "owner-occupied" in county-based data.
Another wave
Local media outlets are reporting a possible tsunami of foreclosures about to hit Southwest Riverside County for homes purchased between 2004 and 2007. These are homes where the mortgage amount owed is much more than the property is worth.
According to Tenants Together, in 2008 32,000 actual foreclosure sales took place in Riverside County.
Those renting homes could find notices tacked on to their doors.
"We get a lot of calls from tenants being told not to pay attention to the notices," Preston said. "The landlords are telling their tenants they need to [stop paying their mortgage] to get better terms. However the owner wants to keep getting the money."
But tenants who find themselves in this situation can't just stop paying rent Preston said.
"Up until the property transfers ownership the original landlord is still entitled to try to collect the rent as a landlord," he said.
The real issues begin once the property changes hands, which usually means it is returned to the bank at the trustee sale. After the sale the tenant would receive a 60-day notice to vacate the property.
"We see landlords still trying to collect rent from tenants after they lose the property," Preston said.
While foreclosures extinguish most leases, tenants in California are generally entitled to a 60-day notice to vacate in foreclosure situations. The 60-day notice requirement became law in July 2008 according the organization.
This is why renters need to be pro-active in the process and know their rights before and after a sale.
The bank can demand rent but it's fairly unheard of Preston added. The banks don't want to rent the properties, they want to sell them.
Unethical lenders may not follow the law and try to evict tenants sooner or may have utilities shut off.
Stay informed
Anybody can contact the local county recorder and can find out if a notice of foreclosure has been filed Preston advices. Notices of default are public record.
County offices sometimes have a lag time of a month between filing and the uploading of the information he added.
Tenants Together offers services to help those who think their rental might be in the process.
"If someone calls us we look it up and don't charge them," he said.
One of the telephone volunteers will talk to the caller to find out their housing situation and get the general information needed to refer to the resources they have in a searchable directory of the caller's area including legal representation.
There are also sites online that, for a fee, will notify tenants if their property address enters the foreclosure process.
Foreclosure usually means that tenants not only loose their residence but usually their security deposit.
"The tenant has to sue to get it back and in the meantime they have to find new housing," Preston concluded. "They can try to tell the landlord to use the security deposit as rent during their last month."
By Tenants rights figures, there are at least 2.3 people in every rental unit. Which means for every 5,000 rental units foreclosed, 15,000 people need to find a new place to call home.
Hotline volunteers will assist in many ways, including helping tenants:
• Find out if a particular rental property is in foreclosure
• Identify the new owner after a foreclosure sale
• Learn about what to expect as the property goes through foreclosure
• Connect with local activists engaged in anti-eviction organizing
• Locate organizations that provide legal representation for tenants in foreclosures
• Keep utilities on and get repairs done in all stages of the foreclosure process
• Protect and recover security deposits
• Share tenant foreclosure stories with media, policymakers and the public
• Report illegal conduct to local law enforcement agencies and officials
• Stand up to abusive and unfair conduct during the foreclosure process
Source: Tenants Together
To find out more about tenant's rights call Tenants Together at (415) 495-8012.
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