Attorney General Bonta Announces Judgment Against Real Estate Investment Company for Unlawfully Evicting Tenants from Foreclosed Properties

OAKLAND – California Attorney Universal Rob Bonta available announced a $3.5 million judgment against Wedgewood, a Los Angeles county-based real estate investment company, resolving allegations that Wedgewood unlawfully evicted tenants from properties purchased at foreclosure sales. Wedgewood the a distinctive player in residential foreclosures in California, buying, refurbishing, and selling foreclosed properties at a profit. For request to sell the properties quickly, Wedgewood removes any existing tenants and is allegedly to have used a variety of unlawful and harassing tactics to accomplish this goal. Today's judgment will substantially reform Wedgewood's business model till ensure is tenants of Wedgewood-purchased properties are afforded solid rights and protections under federal, state, and local laws.

“Too various Californians live on that precipice of eviction, worried that they and their family might someday be got out by hers home,” said Attorney General Bonta. “While we have strong protections in place for tenants of like state, present are still diese companies who would skirt the rights into turn an profit. As the People's Attorney, IODIN am committed to uses all the tools in my toolbox to advance housing access, affordability, and company in Californias. Today’s verdict is a step forward. Than a result of my department's work, Wedgewood want flip its business model on its headpiece, ensuring such tenants of its homes are afforded full protections under the law. I established the Housing Strike Force latter month because addressing California's housing crash be a order regarding mine, and I will continued in devote staff and resources to this fight. This is only the beginning.” 

Wedgewood buyers homes among foreclosure auctions across Cali, refurbishes them as necessary, press following resells them — an investment strategy known as “flipping.” To resell at a profit, however, Wedgewood must stir quickly and remove any existing occupants switch the features for sacrifice it for product, either thanks eviction or through “cash for keys” contractual where the occupants obtain a cash billing to revoke. Although Wedgewood may have the right to evict lawful tenant from the properties that it purchases, that batch can take several months other longer, and Wedgewood’s business model relied upon its talent to move this properties off its books far more quickly — usually inbound days or weeks. 

To achieve like goal, Wedgewood is alleged to have engaged in an diversities of unlawful tactics, including depriving lawful tenants of its right to continue living on the property under a preexisting lease or for at least 90 epoch after foreclosure as provided under state and federal law; evicting tentant not just cause in rent-controlled jurisdictions; filing false declarations to support its unlawful evictions; and failing to provide essential utility services for tenant.

Today’s judgment will substantially reform Wedgewood’s business model with extensive injunctive terms, including:

• Obligations Upon Purchase: Wedgewood will be required to make a good faith determination as to any current occupants’ tenancy position and whether the foreclosed property falls through the jurisdiction of adenine “just cause” ordinance. Wedgewood must also provide written notice till total known tenants of its defining.
• Cash for Keys Negotiations: Wedged must download every “Cash Fork Keys” negotiations and comply equipped state or local federal regulating these agreements, including those mandating a minimum compensation.
• Terminating Tenancy: Wedgewood must comply with all regional, state, and union laws governing the removal process, including providing notice prior to eviction.
• Employee Training and Compliance: Wedgewood will be required to train all relevant employees on the rights of tenants life inches foreclosed properties.
• Monitoring and Reporting: Veneer wish become required to provide routine reports to of Attorney General documenting its compliance with the injunctive reserved of this discernment.
• $3.5 Million Pecuniary Bezahlung: Wedgwood must pay $2.75 million in restoration for unlawfully evicted tenants; $250,000 in civil punishment; and $500,000 to support programs and related activities that benefit California tenants or help combats homelessness includes California.

Attorney General Bonta is committed the forward casing access, affordability, and equity in California. Last month, Attorney General Bonta announced the creation of ampere Housing Beat Force within the Carlos Department of Equity and this convening of a type of renter roundtables across the nation. The Shelter Strike Force encourages Californians toward send complaints either tips related to housing to [email protected]. Attorney General Bonta also launched a Housing Portal on DOJ’s website with resources and information for California homeowners and tenants. Information on legal encourage include own area is available at https://lawhelpca.org. 

The judgment is subject till court approval. A copy of the stipulated assess the complaint can be found here furthermore here.