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Foreclosure in CA, security deposit - Landlord Forum thread 358781








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Foreclosure in CA, security deposit by Joan on December 1, 2018 @10:19

                              
What happens to the security when an occupied rental is foreclosed on in California?

Is the landlord that has lost the property the one to return the security deposit, or does the new owner/bank that bought the property at auction?

My searches are giving me answers, so I'd like to know from someone with experience. Thanks!
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Re: Foreclosure in CA, security deposit by Garry on December 2, 2018 @11:49 [ Reply ]
I do not have any direct knowledge or experience, so this is just my opinion. If a bank is foreclosing on a rental property, the tenant should not expect to ever get their deposit back, from anybody, even if their rent is up-to-date, and when they move out, and they leave the property in excellent shape.
If the T had been paying his/her rent to the LL, the LL took that rent and used it for his own purposes, but did not pay the bank. What makes anyone think that the LL would not take the Ts deposit money, and use it up too? The LL may have a drug or alcohol addition, or may have huge medical expenses, and is putting ANY/ALL money he can get his hands on, towards it. So even though the LL would legally owe the deposit to either the T or the bank, it is likely already gone, and the T would have a ZERO chance of getting it back.
And the bank only represents itself, not a T. It's out a lot of money, too, so they are not going to "feel" for the T, and give any deposit money to the T.
The best thing a T can do, is start paying their rent directly to the bank, in hopes to stay there as long as possible. If a new owner buys the property at the auction, the T should pay that owner the rent. But the new owner did not get any deposit money at the auction, just the property. So they have no deposit on hand to give back to the T upon move-out. Simply put, the T is only 1 of many people that will not get any money that is owed to them.
Re: Foreclosure in CA, security deposit by Phillip on December 3, 2018 @13:57 [ Reply ]
Not 100% sure in regards to foreclosure, but regardless, do you have proof that you paid a deposit and proof that it is still in good standing prior to the foreclosure? When I sold my last rental property, I provided all the tenants with last minute verification that a deposit was kept on hand for them, as required by all state laws. During my sale, deposits were transferred as part of the sale, to the new owner, but I prepared my tenants with documentation, should they need it, when they leave.

I would get your documentation together and if/when you decide to leave, if a deposit it not returned to you by the owner of record, in the period required by the state law, sue for double or triple the amount (if allowed by law) from the current owner.
Re: Foreclosure in CA, security deposit by Joan on December 7, 2018 @01:40 [ Reply ]
Hoping for an answer from someone who actually knows. Please.

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