Central Valley City Outlaws Bank Evictions of Renters after Foreclosure

Friday, December 23, 2011
Tenants Together

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Banks in Merced, California can no longer throw renters out of their homes just because of foreclosure.  Until now, renters in this high-foreclosure region of California were subject to arbitrary eviction after their landlord's foreclosure unless they held a long-term lease protected by federal law.  Under a new law passed by Merced's City Council that took effect yesterday, banks and private investors will not be able to displace tenants unless the tenants violate their obligations or the owner wants to move into the property.  

"This is the moral high road.  It is the right thing to do," said Councilmember Bill Blake, a former Merced Undersheriff who was an early champion of the just cause for eviction law.  

Mayor Pro Tem Noah Lor, Councilmember Mary-Michal Rawling, and Councilmember Bill Blake authored an Op-Ed in the local Merced Sun-Star last week in which they explained their support for the new law:  “We will not continue to allow banks and other post-foreclosure owners to displace Merced's families for no good reason. The "Just Cause for Eviction" law strikes the right balance: allowing eviction where a tenant does something wrong or where the landlord wants to move into the property, but prohibiting eviction where there is no good cause.”  The Sun-Star issued an editorial endorsing the law.  

The law has overwhelming support from local residents who turned out in droves to oppose a last-minute repeal effort led by local realtors.  Michelle Dirickson, a renter evicted by foreclosure, commented: “this law doesn't cost anybody anything. It doesn't hurt anybody, and it helps families and it stabilizes communities."

Dean Preston, Executive Director of Tenants Together, praised the city council members who supported the law.  "Mayor Pro Tem Lor, Councilmember Blake, Councilmember Rawling and former Councilmember Carlisle deserve enormous credit here.  They took a principled stand in the face of special interest pressure and the residents of Merced will be spared evictions and blight as a result."

Realtors who handle foreclosed properties for banks are leading an effort to overturn the ordinance.  They have found an ally in Merced's newly elected Mayor, Stan Thurston, himself a local landlord who received realtor donations in his recent election campaign.  The effort to repeal the law was stymied on December 19 when the council voted 6-0, the mayor abstaining, for a review by California's Fair Political Practices Commission as to whether Thurston must recuse himself from voting to repeal the law due to a conflict of interest arising from his landlord activities.  City Attorney Greg Diaz estimates that the review will take at least 6 months, during which time renters will continue to have the protections of the local Just Cause for Eviction law that goes into effect today.

"The repeal effort is doomed," stated Preston of Tenants Together.  “It was a bad idea -- an attack on Merced
residents by a bunch of self-interested realtors who work for banks."

Sixteen cities in California have just cause for eviction laws.  The laws vary in scope but all prohibit the eviction of renters after foreclosure unless there are grounds (such as nonpayment of rent) for the eviction.  Several cities have adopted these laws recently in response to the epidemic of foreclosure evictions.  

Statewide, Tenants Together estimates that at least 38 percent of foreclosed units are rentals, with hundreds of thousands of renters displaced since the foreclosure crisis began.   Tenants Together issues an annual report on the plight of California tenants in the foreclosure crisis.  The reports are available on the organization’s website, www.tenantstogether.org. Tenants Together also operates a hotline for California tenants in foreclosure situations.

Tenants Together members in Merced have already started mobilizing to educate renters about their rights under the new law.  "We will make sure tenants are armed with the information they need to assert their rights," stated Angela Fragulia, a Tenants Together member who was evicted from a foreclosed property in Merced and became a leader in the just cause campaign.  "We cannot allow banks to kick more innocent renters out of their homes."


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