What are the legal issues on both landlord and renter on renting a preclosured house?

Answer 1

Not sure what you mean by a 'preclosured house', but I'm going to assume you mean that the property may be facing a foreclosure action.

In the event of a foreclosure, any lease agreement into which you enter will NOT be assumed by the party foreclosing. You still have a legal binding contract, but it will be with the former owner, who will not be able to honor the contract because he no longer owns the property involved.

Hence, when a lender takes ownership, you're going to be evicted. The lender will also not take responsibility for any security deposit you may have placed. You would have to deal with the former owner on both issues.