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May 30, 2012
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SACRAMENTO – A winning entry in State Senator Joe Simitian’s (D-Palo Alto) 2011-12 “There Oughta Be a Law” contest passed Tuesday off the Senate floor. Senate Bill 1191 would warn prospective tenants when the property they are looking to rent is subject to foreclosure. It requires that a landlord who receives a Notice of Default provide written notice to any prospective tenant before a lease is signed. Under existing law, a landlord is not required to disclose this fact to a prospective tenant. The vote was 23-13.
“Obviously, the prospect of being evicted within months, following a foreclosure sale, is something that anyone looking to rent a house or apartment would want to know about,” said Simitian. “A pending sale might also affect a landlord’s ability or desire to take good care of the property.”
The proposal was submitted by Samantha James of San Jose. About a year ago, James rented a property, only to find out two months later that it was in foreclosure. Sale of the property had been scheduled at various times, and then postponed.
As James noted in her contest entry, properties under foreclosure might soon change owners, possibly forcing a new tenant to move out within months, or making it difficult to get a security deposit returned.
“I would not have entered into a lease agreement knowing that the property was in foreclosure,” James said. “The foreclosure crisis is affecting tenants in unexpected ways. I’m pleased that Senator Simitian is standing up for renters.”
“This bill does not prevent the landlord from renting the property,” Simitian said. “It simply requires the landlord to be truthful about the status of the property.”
Simitian said he was pleased by the range of support for the bill, which included both the Western Center on Law and Poverty and the California Apartment Association.
“While the impact of the foreclosure crisis on homeowners has been widely noted, the impact on renters has been less widely recognized,” said Simitian. “Simply put, without notice, renters are at risk of having their homes yanked out from under them.”
Senate Bill 1191 allows tenants to void the lease if a landlord fails to disclose the foreclosure and sets forth other penalties. Federal law requires a new owner who acquires a property in a foreclosure sale to provide tenants without leases a 90-day notice before eviction.
Since 2001, Simitian has invited Californians to submit ideas for new legislation. To date, 18 winning entries have been signed into law. This year, he received 324 proposals from residents of the Eleventh Senate District and from around the state. This year’s contest is the last one for Simitian, who is completing his second and final term in the Senate at the end of the year.
Senate Bill 1191 now heads to the Assembly.