Permit Conditions Not Extinguished by Foreclosure

​Rodriquez v. City of Los Angeles,  B337221(Second Appellate District, Nov. 26, 2025).

The City of Los Angeles granted a density bonus to a property owner in 2005, allowing an additional housing unit conditioned on one of the units being rented to low-income households for at least 30 years. The agreement was recorded in 2006. A lender holding a 2005 deed of trust foreclosed on the property in 2013. New owners who later purchased the property, allegedly unaware of the recorded agreement, sued the City after it demanded compliance with the recorded agreement. The owners claimed that the agreement was extinguished by the foreclosure. The City argued that the agreement was a condition of a building permit and survived foreclosure. The trial court ruled for the City.  
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The California Court of Appeal affirmed the decision of trial court and held that the affordable housing agreement was equivalent to a “condition attached to a permit” under the relevant Government Code section and ran with the land. The condition was thus enforceable against successor owners rather than a junior encumbrance extinguished by the foreclosure.