A foreclosure can be tough on tenants but it shouldn't lead to eviction
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On Oct. 4, 2008, Genevieve Hilpert came home to her apartment in the Outer Mission to find her gas shut off. The 35-year-old, who lives alone, hasn't had gas service since then. Her landlord moved to the Philippines, the bank foreclosed on the property, and a real-estate broker assumed control.
Hilpert, an international student, was told by the broker to continue paying her rent, but she isn't even sure who gets the check.
Hilpert is facing a problem all too common these days: she's a tenant in a building that through no fault of her own is in the legal limbo of foreclosure. Hilpert is relatively lucky she hasn't been evicted. But necessary repairs, like the broken gas service, aren't getting made.
The property manager, she told us, "hasn't done anything. He hasn't turned on the gas. [I] don't know who is who."
Hilpert's case demonstrates a less-publicized part of the nation's housing crisis. In many instances, rent-paying, law-abiding tenants have come home to find padlocks on their doors and notes telling them to find other places.
The renters may have kept up with their bills but the owners have not. And when a bank forecloses on a building, the tenants can be forced out. "The renters we've seen have been displaced," Sara Shortt, executive director of the Housing Rights Committee, told the Guardian. She mentioned that in many instances their utilities have been shut off, and renters have been left in a bind between brokers and banks. She said, "[Renters] are completely innocent victims of [the] financial crisis."
In San Francisco, it's illegal for a bank or broker or anyone else to evict a tenant just because the ownership of a building changed hands. But many tenants don't realize that.
In an effort to promote tenant-rights awareness, the Assessor-Recorder's Office will be circuutf8g letters to inform tenants when a landlord has received a 'Notice of Default' the precursor to a foreclosure. "According to San Francisco law," the letter says, "it is illegal for the new owner to ask you to leave without just cause or shut off your utilities." Since most of the renters who have been evicted by this latest ruse don't speak English, the letter is being circulated in English, Spanish, and Chinese.
The letter advises tenants to contact housing organizations that can help, including the Housing Rights Committee of San Francisco, Comite De Vivienda San Pedro, and the Asian Law Caucus.
"Do not leave your home," said Assessor-Recorder Phil Ting, addressing tenants at a recent press conference.
The Assessor-Recorder's Office estimates that 25 percent of all buildings that received a Notice of Default in San Francisco are occupied by tenants. And that's a lot of tenants: according to the Housing Rights Committee, Notices of Default recorded with the city rose 94 percent between the 3rd quarter of 2006 and the 3rd quarter of 2008.
The Housing Rights Committee of San Francisco reported 75 cases in the past year involving tenants facing displacement after a foreclosure. In the month of September alone, there were 17 cases. The most common problems renters face include utility shut-offs, illegal eviction attempts, not knowing where to send rent, and illegal entry and harassment by brokers and landlords.
The law may seem confusing, and in some cities, a foreclosure may mean the tenants have to go. But that's not the case in San Francisco. The city's rent ordinance requires "just cause" for eviction and a change of ownership, no matter the cause, is not in itself a just cause.
The San Francisco Rent Board's literature makes that clear: "The Court of Appeal held in Gross v. Superior Court (1985) ... that foreclosure, like any other sale, is not a just cause for eviction under the Rent Ordinance and provides no basis to force the tenant to leave."
As Shortt told us, "We're worried about the folks out there that haven't come to us.... We hope through this program people will be educated and know their rights, and not be displaced."