De Witte Mortgage Investors Fund v. Carradine CA2/1

INTRODUCTION

Appellant De Witte Mortgage Investors Fund, LLC1 (De Witte) acquired a property in the City of Los Angeles through foreclosure. De Witte filed an unlawful detainer action to obtain possession of the property. A tenant, respondent Sandra Will Carradine (Carradine), opposed the unlawful detainer action, alleging she had entered into a pre-paid, long-term lease with the prior owner before the foreclosure. Carradine’s allegations regarding her lease potentially brought her within the protections of Code of Civil Procedure2 section 1161b, subdivision (b) (section 1161b(b)), which provides that “tenants or subtenants holding possession of a rental housing unit under a fixed-term residential lease entered into before transfer of title at the foreclosure sale shall have the right to possession until the end of the lease term, and all rights and obligations under the lease shall survive foreclosure.” (§ 1161b(b).) Section 1161b(b) has several exclusions, however, including when “[t]he lease was not the result of an arms’ length transaction” and when “[t]he lease requires the receipt of rent that is substantially less than fair market rent for the property.” (§ 1161b(b)(3) &…