I just found out the house i am renting is in foreclosure am i entitled to still pay the landlord rent?

Question

I live in Detroit Mich, my landlord failed to pay the taxes on the house i am renting i was wondering if i had the first option to buy it since its in foreclosure and if i still have to pay my rent to the land lord since the title to the property is now in the custody of the michigan tressurer. I would like to purchase the title from the tressurer?

Answer 1

There are a few things that I would suggest that you do at this stage. First, contact the treasurer's office to explain your situation concerning the rent. Also, I would suggest contacting a real estate attorney (if you can't afford one, check into the local law schools, they often do consultations for free to help teach the students, however, they won't assume any liability). Depending upon what stage of the foreclosure the house is in, you may have to continue paying rent to the landlord. Foreclosures can get very confusing, which is another reason that I suggest consulting an attorney. Chances are, you will not be able to purchase the title directly from the treasurer's office. Normally, they will auction off the property (which you'll be able to bid on if you choose) publicly. Again, I'd suggest contacting the treasurer's office first and explaining your situation to them. If they are not able to help you, they're normally really good at referring you to someone who can. Good luck, I hope this works out for you.

Answer 2

You used the word "entitled" incorectly. But yes anytime anywhere you rent or stay somewhere you MUST pay rent.
You don't know that you have the opportunity to buy it or not. When a house goes into foreclosure it goes back to the bank so you'd have to deal with the bank, pay the back taxes, have your downpayment ready, etc.
Sometimes people can live in foreclosed homes up to 5 years before they have to get out. And, maybe the landlord is trying to make payment on those taxes and that's why you're there paying rent.

Michigan might have different laws than here but if someone doesn't pay their taxes and falls into foreclosure then the house would be sold at auction on the courthouse steps. For that you'd need cash to buy (and of course pay for the house and taxes). Usually places that are behind also fall into disrepair so people like lawyers and doctors and real estate people would be buying that house with cash and hiring a crew to update the place to code and fix it up and then sell it for a higher cost.

Answer 3

You don't have the first option to buy it unless your lease states that you have that right. It's usually called a "right of first refusal," or some similar clause. However, your old lease may not apply if the landlord does not own the house any longer.

You do not have to pay the landlord rent, if he is no longer the owner of the home. Michigan has a 6 month redemption period after the sheriff sale of the home, however. The landlord may be able to collect rent from you during this period. But if it is after the redemption period, then the landlord is no longer entitled to rent, and your lease agreement with him is no good.

If you want to purchase the property from the new owner, contact them or their representative and ask if you can put in an offer on the house. They may have the property listed through a local real estate agent, or are selling it directly. But it should not be a problem to purchase the property from them, as long as you can qualify for the new mortgage.

The only thing you might want to do is find out who you owe rent to at this point, and if they are collecting it. If you attempt to purchase the property, the bank will want to see your rent payment history through a verification of rent, or cancelled checks, etc. If you haven't made a rent payment in some months, they will want to know why. Obviously, due to the foreclosure situation, you'll have a reasonable excuse, but you should try to cover your bases anyway, just in case.

Good luck!

ForeclosureFish
http://www.foreclosurefish.com/

Answer 4

It depends upon how far into foreclosure it is. I would contact the treasurer and talk to them. Often times foreclosures for taxes are 'reversible' if they canpay the back taxes. Other times they're not. Find out for sure...in the mean time I'd either keep paying my rent or put it into a seperate, safe account if you feel he doesn't actually own the property anymore....but dont just spend it.

Answer 5

It may be as simple as to contact the Treasurers Office, paying the back taxes, showing the Treasurer you have the ability to pay or have been pre approved by a bank for the value of the property. Don't be bullied by the landlord, he may be the one being evicted and your may just be a part of the next buyers' part of the real estate deal and then you'd get to stay.

Answer 6

Interesting question, but since the landlord can still get the home out of foreclosure I would suspect he can evict you if you do not pay your rent. Check with real estate lawyer. But do not give the address as the lawyer may go behind your back and get ahold of the property.

I don't trust most lawyers.

Answer 7

I would contact the Michigan Treasurer to find out. My first thought was "of course, it's still his land and you're living on it"... but if he no longer has the title, I would think rent would be payable to the new titleholder. Good luck... I hope you get to buy it for a great deal!

Answer 8

Find a real estate attorney that deals with foreclosure.
Very detailed and important for an internet decision.

If an attorney is too big of a step, see what amt. of a mortgage you can qualify for. Basics...are found with a mortgage broker.

Answer 9

Saunter down to the sherrif's sale and bid at the auction.....as for rent....godo qtn. find out from a lawyer whether you should continue making payments to the landlord or to his lender directly..