Short Sales and Tenant Rights in California

short sales 

Property SHORT SALES are completely different in purpose, law, and procedure, than that of foreclosures. 

A renter of a home in California where the owner is going through SHORT SALE won't have the same legal protections as compared to foreclosure.

A SHORT SALE is where the home/property is allowed by lender/lienholders to be sold for less than the amount of the outstanding mortgage/home loans.

There are legal protections for tenants where there is a foreclosure; the U.S. Protecting Tenants at Foreclosure Act gives rights to "bona fide" tenants living in a property that changes ownership due to a foreclosure.  tenant protections

This requires a minimum of 90 days' notice to month-to-month tenants after the foreclosure has been completed and that tenants who have a bona fide lease are entitled to remain until the lease term expires. 
However, these legal protections for tenants apply only after a foreclosure has been completed and not with a SHORT SALE.

In California, foreclosure is completed when a trustee auction sale has occurred after foreclosure, with new legal title to the person/company purchasing the property at the trustee sale. 

A SHORT SALE takes place when there is agreement between the current owner, the buyer and lender/lienholders, for sale at a price less than what is owed.  This would help the owner avoid foreclosure and find a buyer/new owner before his/her rights are extinguished. 

different than foreclosures The U.S. law protections will not be available to a tenant if foreclosure is incomplete. 

In a California property SHORT SALE, the new owner taking title becomes landlord and can decide whether to continue tenancy or terminate that pursuant to the standard 30-notice time, or with a 60-day notice time if the renter has been a tenant for more than one year.


This is for information only about short sales in California and not the providing of legal or tax services.  Law re tenant protections is different in other states and jurisdictions.  You should consult with an attorney about your rights as a tenant where the property is in a short sale situation.

Harrison K. Long – solutions for real estate and business – REALTOR® and broker associate, Coldwell Banker Residential Brokerage– 949-854-7747 (phone) – (email) – CA DRE 01410855 – SFR short sale and foreclosure resource certified by the National Association of REALTORs®.

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Thanks for contacting us about listing and selling of homes and properties at Irvine, Newport Beach and Orange County, California. 

Posted via email from Explore OC Homes

About Harrison K. Long

Professional real estate representative, Realtor, GRI, Broker associate, Evergreen Realty HomeSmart, Irvine and Orange County, CA - CALBRE 01410855 - Helping property owners, estate trustees, executors and administrators, fiduciaries, bankers, investor group managers, with listing and sale of properties. California Association of Realtors (now serving on its board of directors); National Association of Realtors. Attorney member of the California State Bar Association #69137 - Contact by telephone or text at 949-701-2515.
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