Short Sales & Tenants

What happens with tenants at a property after conclusion of a short sale?

U.S. law protects tenants at a property after foreclosure –  Protecting Tenants at Foreclosure Action law – which gives rights to “bona fide” tenants living in a property after changes ownership due to a foreclosure.

This law requires a minimum of 90 days notice to month-to-month tenants after the foreclosure is completed.  Tenants who have a lease are entitled to remain until the lease expires.

However, these protections for tenants apply only after the foreclosure has been completed.

In California, foreclosure is completed when a trustee sale has occurred, resulting in a new legal title to the person or company who purchased the property at the trustee sale auction.

The tenant after short sale will not be protected by PTFA unless and until a foreclosure is completed.  The new owner becomes the new landlord and can decide to continue tenancy or terminate it in 30 days, or 60 days if you have been a tenant for one year.


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Thanks and have a great day!

This is for information only and not the providing of tax or legal services.   You should consult consult with a professional and experienced Realtor if you need to avoid foreclosure.  

By Harrison K. Long – Professional real estate representative, REALTOR and broker associate, HomeSmart Evergreen Realty – 949-701-2515 (phone) – – CALBRE #01410855 – Now serving as an appointed director at the California Association of Realtors – also an attorney member of the California State Bar association #69137

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