California Ruling May Launch Many Eviction Lawsuits

Thousands of civil lawsuits can be expected in U.S. courts after a California ruling that banks foreclosing on homes that are being rented become, in effect, the new landlord – and thus subject to the same eviction rules as any other landlord. This is important in hundreds of thousands of cases where the banks simply evicted renters when they took over homes, sometimes on short notice and sometimes destroying property.

Businessweek has a report: “The ruling ‘says essentially that banks and other players in the mortgage industry have to play by the same rules as other property owners,’ said Richard Rothschild, an attorney for renter Rosario Nativi, who lost her possessions and Sunnyvale, California, home in 2009 after the homeowner defaulted on the mortgage, unbeknown to Nativi, and the bank acquired the property. Nativi’s lawsuit, which seeks damages for the loss of home and property, will proceed in state court in San Jose, California, he said.

During the housing bust, more than 200,000 tenants lost their homes in California alone. While this was a state court ruling, the California Supreme Court has let it stand and experts think it will trigger the issue in other states.