Emma

City: 
San Jose
Residence Type: 
detached
Landlord Type: 
Private Landlord -- No Rent Control

We are renting a house in San Jose, CA. On April 22 2009 there was a "notice of trustee sale" taped to our door, advising that the property was going to auction on May 11, and that if it did not sell, ownership would revert to the bank. We discussed this with our landlord, and several days later he advised us that he had been granted additional time to negotiate with the bank, and that the trustee sale would be postponed for at least 90 days. We didn't take this at face value, and rang the tenants together hotline to see what our rights were, and how we could figure out if the house did go to auction or not. They advised us to ring the County Recorder's Office. After a frustrating game of "phone tag" around the County Recorder's office, Tax Assessor's office and Tax Collector's office, we finally got advised that the County Recorder's website could be searched to find any recent changes in ownership of property, and that this database is updated weekly. Our next rent to the landlord was due on May 15th (4 days after the trustee sale), so prior to giving him the next month's rent, I checked several times on the County Recorder's database to see if the property had changed hands, searching under both the APN number of the property, and the name of our landlord. By May 21st, there was nothing on the database saying that the property had changed hands, so we figured the landlord was telling the truth about postponing the trustee sale, and paid him rent for the period May 15-June 14th. On May 28, we got a notice posted on our door stating that the bank now owned the property and wanted to offer us "cash for keys" to move out. Further investigation (ringing the number on the notice) revealed that the house did go to auction on May 11th, but nobody bought it, so ownership reverted to the bank. The landlord was as unaware of this as we were, as he'd been relying on the same County Recorder's website search that we were (perhaps he was lying to us, but I do believe that he sincerely thought he had been granted more time to negotiate). So now, we are out of pocket by almost $4000 (half being the month's rent we paid the landlord when he didn't own the property, and the other half being our security deposit of one month's rent). And our former landlord says he does not have the money to pay us this amount.
LESSONS:
1. Do not trust that your landlord knows whether he still owns the house or not.
2. If possible, attend the Trustee Sale yourself, so you know whether the property was put up for auction or not. Do not rely on County records to be up-to-date, or for anyone working there to be able to tell you if the property went to auction or not.
3. If a "Notice of Trustee Sale" is posted on your door, DO NOT PAY any further rent payments to your landlord. Place the money aside, so that if it later turns out that he does still own the property, you are able to pay it immediately. Tell the landlord to use your security deposit as rent instead - that way, the landlord now owes you nothing, so if the house does get foreclosed, you aren't left with him owning you money and not being able to pay. DO NOT WORRY about your credit rating for not paying the rent after you receive notice of trustee sale. That was what we were concerned about, but he would have to take you to court in order for anything bad to show up on your credit report, at which time, if you've been placing the rent in a safe place, you'll be able to pay immediately, if he can prove he still owns the house.

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