Real estate law. The rent I'm paying, isn't being used to pay the mortgage?

Question

I'm in California. The owners of this rental i'm in haven't paid the mortgage for 6 months. Notice of default was filed on 7/19/07. They were given 90 days to get current or sell. Or the house goes on the auction block Oct 18th. Why are they entitled to any more rent? If legally I have to continue paying rent. The law needs to be changed.
What is going to happen after the sale? When can I expect to be kicked out?

Answer 1

In general the lease will be wipe out at foreclosure,

Once the first note forecloses all notes, liens, leases that encumbrance the property and are junior to the first note are wipe out, few exceptions for federal tax, state tax, local tax and local utilities stay with the land and are not wipe out

so better start to save for a new place, but their is always the chance who ever buys the place may want a renter

Answer 2

2

Answer 3

Here are the facts (FROM EXPERIENCE).
My son recently went through this and many many many renters in California are getting screwed because of the foreclosures.

My son consulted with an attorney here in San Diego and was advised to get another place to live asap. When the foreclosure happens and the auction takes place, you will most probably be evicted by the new owners anyway. The old owner most probably not take you to small claims because he cant even afford to pay his bills, let alone pay for a court hearing.

The sooner you get a more stable place to live - the better off you will be - physically, mentally and financially.

It is sad that renters are taking a hit on this foreclosure market. Also remember...you will not get your deposit back and rents are skyrocketing in california right now - due to the foreclosures (cause people need a place to rent when they lose their homes).

good luck...:)

Answer 4

Your liability to the owner to pay rent and the owner's liability to pay the mortgage are two separate and distinct issues. They are not directly related.

If you have a lease it will generally survive the foreclosure process. Once your lease expires you may be required to leave. The new owner, most likely the bank, will advise you once the foreclosure is complete and what you will need to do.

If you stop paying rent, you will be evicted, plain and simple. The eviction will proceed much more quickly than the foreclosure will AND you'll have an eviction on your credit record. For that reason alone you MUST continue paying rent! Whether the landlord pays his mortgage or not, he's legally entitled to the rent, PERIOD.

Some banks will allow you to remain in the home while they try to sell it since an occupied home will not deteriorate nearly as quickly as an unoccupied one will. They will require you to allow prospective buyers to inspect the property at reasonable hours in exchange for remaining in the home.

It's also quite likely that they will offer to sell you the home, very possibly at a favorable price and with very favorable loan terms.

Answer 5

They are still entitled to the rent - that has nothing to do with whether they're paying the mortgage. The rent is a contract between you and the owner. The mortgage is a contract between the owner and their lender. The two contracts are totally unrelated.

You might or might not have to move after it's sold. If someone buys it who wants to rent it out, they might be glad to have a tenant already in the house who wants to stay.

Answer 6

Because there are two agreements taking place.

1) You signed a lease with the landlord that is legally binding. You are obligated to pay rent until October 18th...and IF they become current with the rent, guess what? You can still move out without penalty because you don't have to stick around and hope you have a place to live.

If you don't move out, this is the ONLY time where you don't get a legal 30-day notice...it can be as little as 3 days. So start packing.

2) Were you a party to the mortgage? Are you on the note? Do you own the property? Of course you don't...what is going on with the bank and the owner is absolutely none of your business. The only thing you need to be concerned about is the date that you need to vacate the property.

The law doesn't need to be changed. What he does with the rental payments is his business and none of yours. Renters don't get to dictate what landlord's do with their money, anymore than they can dictate what you do with yours.

Answer 7

the bottom line landlord tenant laws..especially in california favor the land lord heavily. Just the fact that they are not using the rent money to pay off the morgtage you are still obligated to pay your rent as long as you are living there....after the money leaves your hand it is up to them how they use it.

What you should do is contact the financial institution which is foreclosing on the structure and ask them for some advice...such as are you going to be able to stay there until the foreclosure and do they know if you will be able to stay there after words.

I would be looking for another place soon though...and even if you are under contract to lease...in this situation you can break the lease and move without any penalty by virtue of the fact of the uncertainty of the situation.

I am not a lawyer...and don't live in california so you may be able to go to legal aid or contact your state attorney general for more clear advice.

Answer 8

it is none of your concern what your landlord does with the rent. If you wish the responsibility of home ownership then buy your own home. Why shouldn't you pay rent - as you noted if he doesn't pay the mortgage there are consequences like loosing your assets. At any time you may get notice to vacate if the new owners decide to live there themselves.

Answer 9

you can come and move in with me,

Answer 10

so?