Is there a way to detect if an owner has engaged in fraudulent business practices with the goal of evicting a long term tenant? I believe owner intentionally allowed his property to go into foreclosure then had a friend re-purchase property at an auction for a much lower price. His friend will then proceed to evict the tenant to recover unit for the previous owner who in turn will significantly raise the rent on the unit. Title will then be returned to former owner.
Tenant has been in the unit for eleven years and the unit is under Los Angeles Rent Control. Tenant is stable, quiet, and has never violated any terms of his month to month agreement. The owner has twice tried to evict him (and lost) and owner’s past behavior includes deceitfulness and duplicity.
There are many facets to your question. With respect to the fraudulent business practice, it is possible to search and analyze public records to determine if there is a pattern of fraudulent activity, and if so, a lawsuit could be brought against the landlord and the foreclosing new owner (alleged co-spnsipirator) by either the Attorney General, City Attorney or a private aggrieved party under California Business and Professions Code section 17200.
But let me focus on the eviction aspect, which I suspect is your primary concern.
The Los Angeles Rent Stabilization Ordinance (RSO) protects tenants from arbitrary evictions and permits only twelve legal reasons for eviction. Lenders and their agents violate the RSO when they attempt to evict tenants on the basis of foreclosure or in anticipation of the sale of the property. The sale or foreclosure of a residential rental property is NOT one of the twelve legal reasons for eviction under the RSO.
If a tenant is residing in a Los Angeles City rent-controlled unit with "just cause" eviction protections, the tenant cannot be forced to leave just because the landlord sold the building or lost it in foreclosure. Of course the tenant must continue to pay rent on time.
Under the RSO, tenants evicted for "no fault" reasons (which includes a foreclosure) are entitled to relocation assistance of at least $7,300 if the tenant resided in the unit for less than 3 years, and $9,650 if the tenant has resided in the unit for 3 years or more. If the rental unit is occupied by a qualified tenant (senior citizen, disabled adult, or dependent child), the qualified tenant is entitled to $15,500 if the qualified tenant resided in the unit for less than 3 years, and $18,300 if the tenant has resided in the unit for 3 years or more.
Therefore, if the new owner (alleged co-spnsipirator) opts to evict the existing tenants, the foreclosing new owner (alleged co-spnsipirator) must still provide the tenant with 90 days written notice. But in addition, the new owner (alleged co-spnsipirator) must also pay the existing tenants any required relocation assistance within 15 days of being served the eviction notice.
The Los Angeles City Council voted to extend the ban on banks and other lending institutions from evicting a tenant in a foreclosed property (even a single family residence) through December 31, 2011, but here is a foreclosure eviction memorandum on this topic:
http://lahd.lacity.org/lahdinternet/Portals/0/Rent/54BULL%20FORECLOSURE%20EVICTION%20MORATORIUM%20Bulletinv2.pdf
In conclusion, if this is indeed a repetitive scheme, I believe the Los Angeles City Attorney's office would be the ones prosecuting. But first file a complaint with the Los Angeles Housing Department for any alleged violations of the RSO. See below:
Some transactions are "shams," and can be set aside as fraudulent by the court to protect a creditor that the property owner was trying to avoid paying. What courts look at are the timing of the transaction, the sale of property to a friend or relative for a price unreasonably low compared to its actual value, and the existence of a creditor trying to get paid. But you're a tenant, not a creditor, and therefore not be covered by this fraudulent conveyance law.
Here, you're suggesting a pretty elaborate scheme, where just to evict a tenant, a property owner was willing to ruin their credit and let the property go to auction by the lender so their friend could buy it and then re-deed it back to them.
You conclude past deceit and unsuccessful evictions were part of that scheme, but without any facts to back that up, it's hard to know what you mean.
The owner can't circumvent the rent control laws, so if the owner does end up owning the property again, you cna report this to the LAHD as a false and deceptive eviction.
Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.
