Home going into foreclosure - I'm the tenant!!!

[jloktalGst]

Her's my situation. We rented a home 11 months ago. last month the property mgmt company, representing the homeowner contacted us about renewing our lease. Both sides agreed to a 6 month extension, though to this point there has not been a new lease presented or signed. Last week we received a letter addressed to "Occupant" stating the home was going to a foreclosure sale on May 4th, and we would have 3 days after that date to move or eviction proceedings would commence. I know that based on the law passed in 2009 I have 90 days, but here are my questions:

1. Should I sign a new lease with the current landlord as planned? Will this get me any standing with the new owner or the bank?

2. I'm not trying to stay anywhere for free, but assuming the home sells on the 4th, who do I pay rent to, (under the old lease rents are due on the 1st of each month)? Do I pay a pro-rated amount to the original landlord and the remaining to the new owner?

3. What happens if the property isn't sold on the 4th? Does the original owner still have title, or does it revert to the bank? Back to who do I pay?

I really need to stay in this property until Oct. 1 if possible, what's my best coarse of action?

Thanks

 

[army judge]

1. Should I sign a new lease with the current landlord as planned? Will this get me any standing with the new owner or the bank?

Sure, you can sign a new lease with the current owner.
The new owner has to honor your leasehold.
He may try to scare you into leaving, but you don't have to go.
He has to accept the same terms as the previous owner agreed to with the same rent!
Some savvy people, get the oerson being foreclosed to lower the rent.
If he does, the new owner has to honor the new lease at that rate.

2. I'm not trying to stay anywhere for free, but assuming the home sells on the 4th, who do I pay rent to, (under the old lease rents are due on the 1st of each month)? Do I pay a pro-rated amount to the original landlord and the remaining to the new owner?

You pay the full amount to the current owner.
The new owner has to work out any payments with the seller himself.

3. What happens if the property isn't sold on the 4th? Does the original owner still have title, or does it revert to the bank? Back to who do I pay?

If the property isn't sold (or foreclosed), you pay to the current owner.
If it has been foreclosed, you'd pay the bank, or whoever took possession from the former owner.

 

[jloktalGst]

I really appreciate the info and answers. Never would I have guessed that I would pay the original owner the month of foreclosure and the new owner wouldn't have recourse against me. Though it works in my favor, it really doesn't seem right the the new owner couldn't have control over their property once the home is purchased by them, lease or not. Again, thank you very much for the info, it makes my life much easier.

 

[MorgansDaddy]

It may not be the idea situation when buying a home, unless they plan to buy it as investment property, then it is perfect because they don't have to find a tenant after they buy it. If they plan to live in it and don't want to wait, sometimes new owners will offer "cash for keys" in that they basically pay the cost of you moving so they can move in the home sooner. I had the very same thing happen to my family, and negotiated a lower rent with the landlord because obviously he was no longer making the payments for the home so he agreed to drop the rent from $950 to $650 a month and he even waived two months rent to equal the deposit we paid when we moved in because he knew he no longer had the deposit and couldn't transfer it to a new owner. Also, I had him agree to terminate the lease and let us be on a month to month lease. After a few months we gave our 30-day notice and moved on our terms which was great. He negotiated a short sale though before the auction to stop the foreclosure and the house still is sitting on the market though and he even went on to get new tenants which is just sad.

 

[MorgansDaddy]

Oh how could I forget the most important thing of all... Get EVERYTHING in writing if you do negotiate anything to be different than what your current lease says.

 

[jloktalGst]

Thanks for the additional info. Like I said in my earlier post, I had no idea my lease would survive the foreclosure. It certainly isn't an ideal situation, but it beats being tossed into the street.

 

[army judge]

Thanks for the additional info. Like I said in my earlier post, I had no idea my lease would survive the foreclosure. It certainly isn't an ideal situation, but it beats being tossed into the street.

The lease is legally a leasehold.

You don't own the proerty, but the owner has leased you use of the property.

Your use is exclusive even to the owner's.

It is one reason you pay rent.

Don't feel sorry for the buyer.

If he doesn't like the terms, he doesn't have to buy.

Or, he can negotiate a better deal with the potential seller.

Be secure in your lease.

Do not get any agreed to changes just in writing, however.

To protect you, they have to be addendums to your current lease.

The lease is also what the new buyer is purchasing.

Well, not the lease, but the rights to your payments.

If not, the legal standing of such agreements are suspect.

Don't feel sorry for anyone.

This is the law.

This arises from English Common Law as far back as the 15th Century (or earlier).

Finally, as I always say, I provide "legal advice", not "fair advice".

This is after all a "LEGAL" forum.

If you seek "FAIR" advice, seek the "FAIR" or "RIGHT" forum. :nuts

But, then it wouldn't be legal, would it? :yes:

 

[jloktalGst]

Army Judge, thanks for the clarifications. Common sense and the law in my experience, though not necessarily mutually exclusive, don't walk hand in glove either. I will get an addendum ASAP with a 12 month extension, as well as the right to terminate on my side with 30 days notice. Based on the situation, I want to move as quickly as is feasible, but I want to protect myself in case something unexpected arises and I am not able to move.

 

[jloktalGst]

Just when you think you have a solution. Ok, new wrinkle. I talked with the property management company, and told them I wanted a 1 year lease with a 30 day termination option on my side. After some ridiculous statements about that it wasn't fair to the homeowner, it came down to, we can't enter into any lease agreement with the landlord, because they are not current. So now the questions are:

1. If they refuse to do a new lease, what will the bank or my new landlord be able to demand for rent? Remember my current lease expires on the 30th of April 2010, (this month).

What other things can or will happen that I'm not considering?

Thanks in advance

 

[army judge]

Just when you think you have a solution. Ok, new wrinkle. I talked with the property management company, and told them I wanted a 1 year lease with a 30 day termination option on my side. After some ridiculous statements about that it wasn't fair to the homeowner, it came down to, we can't enter into any lease agreement with the landlord, because they are not current. So now the questions are:

1. If they refuse to do a new lease, what will the bank or my new landlord be able to demand for rent? Remember my current lease expires on the 30th of April 2010, (this month).

What other things can or will happen that I'm not considering?

Thanks in advance

If the bank or the current owner wants to raise your rent, a 30 day notice must be given.

If you are there in may, then the rent stays the same.

Anytime before April 30, the landlord can raise your rent from $500 to $600.

This is just an example.

If they did it on 29 April, you'd pay the same in May.

But, June rent would be $100 more.

If I were you, I'd plan on moving.

You could now be bombarded with unusual events regularly.

You should speak to the landlord, if you want to stay.

The management company is trying to help facilitate a sale or foreclosure by talking you out of a lease.

It isn't up to them.

It is up to the legal (albeit in arrears) landlord.

If he gets foreclosed, the bank or new owner will have to honor your lease.

The landlord is probably mad, so he might work with you.

He could even lower the rent, if you offered him a $200 bonus to help him help you.

He is going to lose the property anyway.

You have nothing to lose by asking.

You can fight it, but why bother?

This is going to cost you, or jeopardize your rights.

It may do both.

There are many properties available, so seek one.

The woprse that can happen, is that you'll be a month to month tenant for a few months beyond April.

That now means, that you'll have to give 30 days notice, when you do decide to leave.

If the lease speaks to this, it will read SOMETHING like this:

A. Month-to-Month: This Agreement shall continue as a month-to-month tenancy. If at any time Tenant desires to terminate the tenancy, Tenant may do so by providing to Landlord written notice of intention to terminate. Such notice to terminate must be provided to Landlord at least 30 days prior to the desired date of termination of the tenancy. If at any time Landlord desires to terminate the tenancy, Landlord may do so by providing to Tenant such written notice of intention to terminate at least 30 days prior to the desired date of termination of the tenancy. Notices to terminate may be given on any calendar day, irrespective of Commencement Date.

Check your lease, because it may require you to give 60 days or more.

The lease will govern, unless it is silent on this.

Then Texas law applies.

Texas law says:

A month-to-month tenancy may be terminated by either the landlord or you for ANY reason by giving one month's advance notice. For example, if you get into a disagreement with your neighbor after he has a party late at night and you call the landlord to complain, the landlord could ask you to move in 30 days. Although the landlord would not be acting wisely, the landlord could legally terminate the month-to-month lease (or fail to renew your lease at the end of the term). If you failed to move, the landlord would probably succeed in an eviction case.

The notice can provide for termination on any day of the month, as long as the date of termination is at least one month from the date of the notice. If the notice terminates the tenancy on a day which does not correspond to the end of the month or the beginning of a rent paying period, you need only pay for rent up to the date of termination. However, if rent is paid more than once a month, it is sufficient to give a termination notice only equal to the interval between rental payments. For example, if you pay your rent weekly, you or your landlord need give only one week's notice in order to terminate the tenancy. A written notice is not necessarily required, but is strongly encouraged.

 

[jloktalGst]

Once again, great info and thanks.