Housing foreclosures on rental properties affects servicemembers Published Feb. 3, 2009 By 1st Lt. Thomas Alford Air Force Flight Test Center Staff Judge Advocate EDWARDS AIR FORCE BASE, Calif. -- It is difficult to turn on the television or to pick up a newspaper without hearing about the housing market crisis. Foreclosures in the United States are at an all-time high and California is one of the worst hit states in this growing predicament. The foreclosure crisis is directly affecting California property owners and, indirectly, renters as well. Many renters may be forced from their dwellings, with little notice, by banks foreclosing on the rental property. Due to the frequency of this situation in recent years it is important to explore the legal remedies for servicemembers faced with eviction due to a foreclosure. Several questions can arise once a service member discovers that they are renting a home that is entering foreclosure: -- When a landlord's rental property is in foreclosure does the servicemember have a right to remain in the rental property? If so, for how long? -- Does the servicemember have any other legal rights or remedies against the landlord? -- Will the government move the servicemember's belongings in the event of an eviction? Until recently, California law did not provide a great deal of protection for tenants facing eviction due to a landlord's foreclosure. However, California has recently enacted a law provision that extends the notice period afforded to renters. As of Sept. 6, 2008 and until Jan. 1, 2013, posting and delivery of a notice to the resident of a foreclosure sale must occur at least 20 days prior to the date of the sale. In addition to this requirement, new property owners may either give renters a new lease or rental agreement, or provide renters with a 60-day eviction notice. So, renters should have at least 80 days after being first notified of a foreclosure sale before they are forced to move out of rental properties. The Servicemembers Civil Relief Act also provides additional protection to servicemember tenants faced with eviction due to foreclosure. Section 531 of the Act states that, "[e]xcept by court order, a landlord (or another person with paramount title) may not . . . evict a service member, or the dependents of a servicemember, during a period of military service . . . from premises . . . that are occupied or intended to be occupied primarily as a residence; and . . . for which the monthly rent does not exceed $2,400 . . . ." A court order will only be issued if the servicemembers are served notice and have had an opportunity to respond. After being served a notice of eviction by a bank, servicemembers may file an application with the court to stay the execution of the eviction for a period of 90 days. Servicemembers who have received a notice of eviction should seek immediate advice from the legal office. When a mortgage goes into default, the landlord still has the right to collect rent all the way up to a sale. The landlord may have to pay that money over to the lender while in default, but that does not affect the tenant's duty to pay rent. However, once a foreclosure sale takes place, tenants should no longer pay the former owner. So, the renter still has to pay rent to the landlord even though the renter has received notice of foreclosure until the foreclosure sale has been finalized. Regarding security deposits, the landlord must return the deposit prior to a foreclosure sale. If he or she does not, then the tenant can pursue action in small claims or superior court. After a foreclosure sale, a servicemember or the dependents are authorized a short distance move when the move is necessary due to a landlord's foreclosure. The foreclosure action must come against the landlord's privately owned property that the landlord is renting or leasing to the servicemember or the dependents. The move will not be authorized if the servicemember is the actual owner of the property being foreclosed upon. Any member who is considering this option should first exhaust all the remedies available under the SCRA and other California laws, and then contact the base housing office. For more information, call the Edwards Legal office at 277-4310. (First Lt. Michael O'Brien contributed to this story)