FOR IMMEDIATE RELEASE
September 26, 2012
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“RENTERS IN FORECLOSURE” SIGNED BY GOVERNOR
SACRAMENTO – A winning entry in State Senator Joe Simitian’s (D-Palo Alto) 2011-12 “There Oughta Be a Law” contest was signed into law Tuesday by Governor Jerry Brown.
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.
“I am extremely pleased that the Governor signed this bill,” said Simitian. “In this foreclosure crisis, much of the focus has been on homeowners, and renters have gotten lost in the shuffle. This bill, once it becomes law, is going to ensure that renters don’t get their homes yanked out from under them, and are fully informed before they sign a lease on the dotted line.”
The bill proposal was submitted by Samantha James of San Jose. About a year ago, James rented a property, paid her security deposit, and furnished her apartment, 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 in 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.
A foreclosure sale can extinguish leases. For example, if the new owner intends to make the property their residence, then existing leases are invalid.
Additionally, during foreclosure, tenants can face:
- Loss of their security deposit;
- Decreased services from the landlord;
- Additional moving and refurnishing costs;
- Having to change schools for children; and,
- Uncertainty and potential exposure to bad actors.
“As a California renter, I am thrilled that Governor Brown and Senator Simitian recognize the importance of giving California tenants the opportunity to make informed decisions about where they live,” James said.
“Tenants are often shocked to learn of pending foreclosure proceedings after they move into a new home,” said Dean Preston, executive director of Tenants Together, a statewide organization for renters’ rights. “Tenants need this information before they move in, so they can make an informed choice about where to live.”
“The bill is a common sense solution. It doesn’t prohibit a landlord from renting a home; it simply requires the owner to ensure that the tenant has full disclosure about the rental home that is currently facing foreclosure,” said Debra Carlton, senior vice president of the California Apartment Association.
SB 1191 allows tenants to void the lease if a landlord fails to disclose the foreclosure and sets forth other penalties.
The bill takes effect on January 1, 2013.
Since 2001, Simitian has invited Californians to submit ideas for legislation. To date, 20 winning entries have been signed into law. In 2011-12, he received 324 proposals from residents of the 11th Senate District and from around the state. This year’s contest is the last one for Simitian, who is completing his final term in the Senate at the end of the year.
A copy of Simitian’s letter to the Governor urging the signing of the bill is attached can be found online.
For more information on SB 1191, visit http://www.senatorsimitian.com