Shadow victims of the mortgage crisis: renters

"It is to your benefit to accept this assistance check," it said. "Please keep in mind that the eviction process has started."

Offering financial inducements is a common practice when renters are being pushed to vacate a foreclosed property. It's called "cash for keys" and can involve payments of as much as $1,500, ostensibly to help a tenant resettle but also to get him or her to waive any claims to the rental property.

Salgado was told by Century 21 that if he didn't agree to the deal right away, his resettlement money would be slashed to $750 within a week and then to $500 a week after that. Then it would drop to nothing, and he'd still have to move out. "I felt very pressured," Salgado recalled.

He said he agreed to the $1,250 payout and moved himself and his two kids -- ages 2 and 3 -- to a nearby motel. His dog and cat were put in a kennel.

It was, to say the least, a less-than-ideal situation.

State officials said that under California law, existing rental agreements are essentially wiped out when a property is foreclosed upon. All that's required is that a tenant be given at least 30 days' notice that he or she is being evicted.

But those officials also said that state law can be trumped by local rent-control statutes, which often provide tenants with more far-reaching protections.

These "just cause" provisions of many municipal rent-control laws limit the ability of landlords to evict tenants, even those on month-to-month leases. They also include cases in which ownership of a property changes hands, such as a foreclosure.

"Tenants cannot simply be evicted," insisted Adam Radinsky, who heads Santa Monica's consumer protection unit. "There's no question about that."

Actually, it depends on where you live. Cities with "just cause" provisions include Los Angeles, San Diego, Santa Monica, Thousand Oaks, West Hollywood and Glendale.

However, not all "just cause" provisions are created equal. San Diego's requires that a tenant occupy a property for at least two years before the provision takes effect. Glendale's allows an eviction to proceed if the landlord plans to remove the property from the rental market or have a relative move in.

Moreover, not all rental properties may fall under a city's rent-control protections. In such cases, state law would probably apply, which would allow a foreclosure-related eviction to go ahead.

"In that case, the tenant may be in a really lousy position," said Al Shelden, chief of consumer law in California Atty. Gen. Jerry Brown's office. "There may not be many rights to begin with."

That was the predicament Salgado found himself in. Hesperia has no rent-control law and no "just cause" provision. State law thus allows him and his family to be thrown out on their ears.

Salgado said he was told by Century 21 that he'd receive his check right away. So he immediately found another house to rent in the vicinity.

But no check arrived. And as the days in the motel passed, Salgado said he quickly ran out of money. He moved his family and pets to his mother's Beverly Hills apartment this week. He has to commute about 150 miles a day to and from work.

A spokeswoman for Century 21 said Tuesday that she expected Salgado to receive his check by the end of the day.

If you are a renter and receive a notice from a bank or property manager saying your rented home has been foreclosed upon, contact City Hall to find out what rent-control rules may exist in your area and whether the property is protected.

Salgado said he hoped that once he got his check, he'd be able to relocate his family to a new home in Hesperia. All in all, he added, everyone's taking things in stride.

"Except our cat," Salgado said. "He's really freaking out."

Consumer Confidential runs Wednesdays and Sundays. Send your tips or feedback to


Plan: Mortgage lenders offer a 30-day grace period. Business, C3

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