California Attorney General Should Follow Connecticut AG’s Lead: Go after banks, realtors and lawyers that violate tenant rights

by Dean Preston

Across our state, realtors and lawyers working on behalf of banks are violating federal law by illegally pushing renters out of their homes after foreclosure. The results are devastating, with thousands of tenants being driven into homelessness and communities left with vacancies and blight. Responding to a similar pattern of illegal evictions in Connecticut, Attorney General Richard Blumenthal recently announced a new initiative to aid tenants of foreclosed properties. Blumenthal issued cease-and-desist letters warning law firms, real estate companies, banks and loan servicers to stop illegal evictions. Here in California, tenants want to know whether Attorney General Edmund G. (“Jerry”) Brown, Jr., will follow Blumenthal’s lead and take decisive actions to protect vulnerable tenants.

The Protecting Tenants At Foreclosure Act of 2009 (PTFA) allows tenants to stay in their homes after foreclosure for at least 90 days or until the end of their lease term, whichever is later. In cities with just cause for eviction ordinances, tenants may not have to vacate at all after foreclosure. Despite these laws, real estate agents and lawyers working for banks routinely violate tenant rights. Our organization, Tenants Together, operates California’s only statewide hotline for tenants in foreclosure situations. We receive calls every day from tenants around the state who are being lied to about their rights and illegally evicted from their homes by bank lawyers and real estate agents.

Blumenthal’s February 2010 press release is worth quoting at length, since it shows a profound understanding of the damage that these illegal evictions have on tenants and entire communities.

“Evicted tenants are typically current on their rent, but face eviction because of their landlord's financial troubles. In many cases, real estate agents have pressured tenants to leave, without informing them of their rights under federal law. Some banks begin eviction procedures immediately upon completing foreclosure, despite the consequences for tenants and a federal law that requires a 90-day delay.”

"Tenants have rights to remain until their lease ends -- rights that deserve respect and enforcement. We're warning banks and real estate interests: foreclosure is not excuse for illegal eviction. These cease-and-desist letters send a message to powerful property owners that foreclosure gives them no right to engage in automatic eviction en masse.”

“Fast-track evictions not only harm tenants, but turn vacant properties into eyesores and even crime havens, diminishing values neighborhood wide.” "Tenants should remain in homes as long as possible -- potentially providing extra income to the new property owner, and benefiting everyone.”

"Tenants in foreclosed properties -- victims of their landlord's financial failures -- deserve to be treated fairly and lawfully when forced to find a new home. Law firms, realtors and lenders have moral and legal obligations to provide fair notice and time for tenants to find alternative housing after foreclosures. We are alerting law firms, lenders and real estate companies that they must follow this law or face legal action."

"Foreclosures devastate property owners, but also tenants whose lives are unfairly uprooted and incredibly inconvenienced. Searching for alternative housing can be difficult, costly and time-consuming -- requiring reasonable advance notice before eviction."

Blumenthal’s office sent the cease-and-desist letters to at least 15 banks and mortgage servicers, nine law firms and six real estate companies.

California has more than its share of real estate agents and attorneys engaging in illegal efforts to displace tenants. Attorney General Jerry Brown should take strong action to protect these tenants and hold realtors and lawyers, as well as the banks that employ them, accountable. In addition, the Department of Real Estate and California Bar Association should investigate and discipline their licensees who violate federal, state and local tenant protection laws.

Please take a minute to write Attorney General Jerry Brown’s office (or call him at (800) 952-5225) and urge him to go after banks, lawyers and real estate agents that violate the Protecting Tenants at Foreclosure Act and other tenant protection laws.