Research the Bank of America COOP short sale program. This program has flex for similar situations.
I worked with Section 8 qualified housing in Missouri and know LLTT rights in AZ. But, it will really depend on California code regarding Tenancy. In AZ, the lease runs with the land. A short sale doesn't affect Tenant's rights because it's a voluntary sale, just like any other sale, so the Tenant's rights remain fully in-tact. Unfortunately, many illegal evictions have been served here and complied with due to lack of knowledge. Foreclosure has a different bearing on the Lease, but this is a short sale. Here's a link to the CA LLTT act. http://www.dca.ca.gov/publications/landlordbook/catenant.pdf