TL;DR — 30 seconds
The tenant doesn't lose the unit when the property is foreclosed. The new owner has to honor a bona fide pre-foreclosure lease until lease end (PTFA), or give 90 days' notice for owner move-in. On AB 1482-covered units past 12 months of tenancy, just-cause and relocation also apply — SB 567 penalty rules included. Foreclosure itself isn't statutory just cause.
§2924.8 — what gets served at the trustee sale
Civil Code §2924.8 requires the foreclosing party to post a notice to occupants at the time of the trustee sale, in English plus several other commonly-spoken languages. The notice tells occupants about their post-foreclosure rights. The §2924.8 notice itself doesn't terminate any tenancy — it just preserves the tenant's awareness that ownership is about to change.
What survives the sale: bona fide leases under PTFA
The federal Protecting Tenants at Foreclosure Act was restored permanently by the Economic Growth, Regulatory Relief, and Consumer Protection Act in 2018. Under PTFA, a tenant under a "bona fide" lease entered into before the foreclosure (arm's-length, not to a relative, at fair-market rent) has the right to remain through the end of the lease term — with one exception: if the new owner intends to occupy the unit as their primary residence, they can terminate on 90 days' notice.
For month-to-month tenants or tenants whose lease ends after foreclosure: 90 days' notice to vacate.
AB 1482 still applies after foreclosure
This is the part that catches new owners. On AB 1482-covered units, the just-cause framework follows the unit, not the landlord. If the tenant has been in place 12 months at the time of the foreclosure, the new owner needs a statutory just cause to terminate — foreclosure itself isn't on the §1946.2 list. An OMI termination by the new owner has to comply with SB 567's full set of rules, including the 90-day occupancy deadline, the 12-month minimum, and the relocation payment at or before service.
The trap: thinking foreclosure resets the clock
Buying a property at a trustee sale and trying to remove an existing 12+ month tenant without statutory just cause is the most expensive new-owner mistake in California. SB 567's actual-damages-or-$10,000-per-tenant penalty applies the same way to the buyer as it would have to the original landlord.
The rent obligation continues
The tenant's obligation to pay rent doesn't stop at foreclosure — it just shifts to the new owner. Tenants who stop paying after the sale create grounds for unlawful detainer on standard nonpayment grounds. The new owner has the original landlord's rights as to past arrears and ongoing rent.
Practical steps for a new owner
- Identify every tenant on the property. Request copies of leases.
- Determine whether each tenancy is bona fide under PTFA.
- Determine AB 1482 coverage and how long each tenant has been in place.
- Decide on path: continue tenancy as new landlord, terminate on PTFA 90-day notice (where applicable), or pursue just-cause termination under AB 1482.
- If terminating: serve the right notice with the right window, paid relocation if no-fault, all the SB 567 boxes ticked.
Common questions
What happens to a tenant when a CA rental is foreclosed?
The tenant becomes a tenant of the new owner. §2924.8 notice posts at trustee sale. PTFA preserves bona fide pre-foreclosure leases until lease end. AB 1482 just-cause still applies on covered units past 12 months of tenancy.
How much notice does the new owner have to give?
PTFA minimum: 90 days. AB 1482-covered units: just-cause framework also applies. SB 567 OMI rules apply to new-owner move-in.
Does the lease survive foreclosure?
A bona fide pre-foreclosure lease generally survives under PTFA, except the new owner can terminate on 90 days' notice for owner move-in. SB 567's full OMI compliance applies to that termination on AB 1482-covered units.
Can a tenant stop paying rent after foreclosure?
No. Rent obligation continues, just paid to the new owner. Nonpayment after foreclosure supports a standard UD.
CA Landlord Laws