New Calif. Law Requires Disclosure of Foreclosure to Tenants

As of Jan. 1, property managers and landlords in California are required to disclose in writing to any prospective tenants if a notice of default has been recorded against the property. The law applies to rentals of single-family homes and apartment buildings of no more than four units.

The disclosure also includes a notice that if a new owner takes ownership of a property following foreclosure, the owner will not be able to evict the tenants for at least 90 days written eviction notices in many cases.

Supporters of the new bill say that that such a disclosure is critical for tenants in making an informed decision about where to live. Opponents, however, argued that such disclosures could worsen the financial conditions of the landlord and even hasten foreclosure.

For landlords who violate the disclosure requirement, tenants may be able to void any lease and recover one month’s rent or twice the actual damages — whichever is greater. Tenants may also be able to recover all prepaid rent from the landlord if the landlord violates the disclosure requirement, according to the new law.

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