The L.A. City Council just approved a new law that puts a one-year moritorium on banks evicting tenants when they foreclose apartment buildings and houses used as rental properties. The law was proposed after Countrywide pressured tenants in foreclosed apartments to leave their units in violation of L.A.'s tenant protection rules (which, yes, are labyrinth, but generally give tenants 60 days to vacate. Most people, including L.A. landlords, agree this is fair). Apparently, the law was proposed after the banks complained that they did not understand that tenant protections applied to them. Well, of course the poor banks didn't understand. Why, oh why, should normal laws EVER apply to the banks?
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Thursday, December 18, 2008
Moritorium on evictions following foreclosures
The L.A. City Council just approved a new law that puts a one-year moritorium on banks evicting tenants when they foreclose apartment buildings and houses used as rental properties. The law was proposed after Countrywide pressured tenants in foreclosed apartments to leave their units in violation of L.A.'s tenant protection rules (which, yes, are labyrinth, but generally give tenants 60 days to vacate. Most people, including L.A. landlords, agree this is fair). Apparently, the law was proposed after the banks complained that they did not understand that tenant protections applied to them. Well, of course the poor banks didn't understand. Why, oh why, should normal laws EVER apply to the banks?
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Some might say that the tenants and the banks do not have a contractual obligation and relationship with one another because the bank is not a signatory on any of the lease agreements. However, It is hard to imagine that the banks granted the loans on rental property with an expectation that the property would not be used as such. I am not so sure that the tenants could maintain residence if they refused to make their lease payments. This just delays at most for a time the raising of the lease price.
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