Foreclosure and being a renter?

Question

I just found out today my landlord has not paid his mortgage for over 5 months, and owes over 89K on it. A notice of trustee's sale paper was taped on our door this afternoon, saying the home will be auctioned off Feb. 2.... So I was wondering what rights do I have as a renting occupant? What should we do?

We live in San Diego, California..... Our lease expires this April.

Answer 1

Wow!

Before you have a heart attack by reading all these socalled experts, please read the following article.

http://www.lawhelp.org/documents/41081propertybeingforeclosed.htm?stateabbrev=/CO/

This is from the state of Colorado, but most states are very similar.

No, the Marshalls, secret service, or anyone from interpol is not going to forcibly remove you from your home, Jeez!!!!!!

Look at it this way:

On the part of the owners this is an investment property. They own this property as a way to make money. If you are a "stable" renter with an excellent payment history, where's the motivation to kick you out, and go through the hassle of of finding a new tenant that's going to be an unknown quantity?

Also, what's going on with your land lord has absolutely nothing to do with you. It's a problem between him and his mortgage company. Not he and his tenant!

He hasn't kept up with the payment to the mortgage, and the mortgage company is going to sell the house to someone else. Ultimately, you will have a new land lord, that's all...

Now, after the foreclosure is over, and you have a new landlord, a couple things may happen. The new landlord may in fact have someone in mind to rent the property to, and this person has every right to do this. But the new land lord also is legally bound to go about this a certain way, and that's dependent on what state you live in. You may have 30 day, or you may have 180 days to find another place, but no one's throwing your belongings out on the front yard tomorrow, and calling you bad names!

It's also possible your new landlord may want to keep you as a tenant, and between the two of you, you will have to figure out a security deposit and rent. Or, more typically, the new landlord will contact you with the new terms, and give you 60 days or so, to either agree or vacate.

Now I don't remember how many people mentioned this, but they were incorrect in telling you to stop paying rent. As I mentioned earlier, what happening with your landlord has nothing to do with you. And with this, Until the sale is completed, he is still the landlord, and you have an agreement with him to pay the rent each month.

However, that one "pretend" real estate agent did say one thing correctly. It will make you fell much more assured if you talk to either the people that are handling the auction, or talk to someone in your state government.

Lawyers make me nervous because they like to charge for any damn thing, and your state will have a Secretary of State, or some sort of tenent's rights board. At least talk to them, and they can explain how things work specifically in your state.

But think this out logically...

All that's really happening is that as far as you are concerned, you are getting a new landlord. You paid your bills on time!

Answer 2

Your landlord collect your rent money and used it for other personal use. I feel very sorry for you,but it is legal for you to get the notice because your landlord was not honest with you.

When they have the auction(cash sale) the new buyer will have to pay the mortgage company/bank the 89k ;plus the foreclosure cost and any additional charges .

Let say that the audition sale comes to 150k (the charges plus 89k = 100k), the original owner will get 50k. All the bank wants is the money to pay off the loan.

Normally the new owner wants to start out with new tenants and new rental agreements. If the units are run down he might want to remodel the units before they are rented again.

Answer 3

Depends on the laws regarding tenants rights in the state you are in. On one hand, if you are still paying your rent on time they have no cause for eviction. On the other hand, California law where I am may be different where you are with regards to eviction proceedings when tenants occupy foreclosures if the tenant can prove they were not in default. I am torn between the fact that an eviction can not take place by California Law if the tenant has not done anything wrong, is paid, and has not been given any notice; and then the fact that generally here foreclosures supersede leases. What state are you in?

Answer 4

The marshall will come to remove you from the home just prior to the auction. Foreclosures are not auctioned off including a paying or nonpaying tenant.

don't pay any rent. Get ready to move by Feb. 1st. But don't leave until the Marshall comes to remove you. Stay until the last day possible so that you can get that time rent free. It could get delayed, that happens frequently. So I'd stay put until the law is there to assure you that you must leave then. They will give you time to get out. Not three days of moving but they'll give you all day. This could drag on until April so all of that time you would not pay any rent.
You will not be getting your deposit back. This is another reason why you should just sit tight to see how long you can rack up free rent to recoop your losses. It sounds rather rude to do this, but look at what is being done to you. If you really want to be sure just call a Real Estate Attorney tomorrow for a free 5 min. phone call. they will most likely say the same.

Best of luck

Answer 5

Depends on where the property is located. A lease survives a sale of a house but I don't think a foreclosure will. I would just sit tight and see what the purchaser has to say after the auction.

Good chance it won't go that far. I would stop paying rent to the landlord in anycase until it is resolved.

Good luck

Answer 6

You find a new place and sue him for damages for breach of contract. You might have to sue him for your deposite as well.

EDIT:
A lease does not hold up against a foreclosure. After the sale, they will evict you.

Regards