landlord fraud...do i have any rights?

[saltydog]

I was leasing a house along with four other roommates in Indianapolis, when it was learned that our house was in foreclosure after paperwork arrived in our mailbox one day, announcing the foreclosure and our eviction date. This was news to us because we had all signed a second lease on the house to live in it for another year. One of my roommates has spoken with a real estate attorney, and it was revealed that the owner of the house filed for foreclosure sometime before we signed the contract for our second one-year lease agreement (though I am not exactly sure when it filed). I just recently learned that a friend of mine, who was another tenant on another property of the same owner, had the exact same thing happen to her. She signed a one year lease and paid her portion of the rent in full, only to find that the property had already been in foreclosure when she and her roommates received an eviction notice. The only difference is that I paid my rent in monthly installments and she paid hers in full for the year. She had also informed me that the owner had filed for bankruptcy.

I have a few questions regarding this issue. 1) Is a property owner/landlord legally obligated to use the tenants rent money to pay the mortgage on the specific property that the tenant has signed a lease for? I ask this only because I believe that my rent money (as well as my roommates and my friend's rent money) was used to pay for another mortgage...or used for something other than the mortgages on the properties that we were subsequently leasing. 2) Could this be considered fraud or something of the like? 3) If this is considered fraud and the owner has filed for bankruptcy, is it possible for myself and the other affected tenants to take any legal action?

Any helpful comments or advice would be greatly appreciated. Thank you.

 

[jacksgal]

1) Is a property owner/landlord legally obligated to use the tenants rent money to pay the mortgage on the specific property that the tenant has signed a lease for?

NO

2) Could this be considered fraud or something of the like?

Explain how this is fraud.

3) If this is considered fraud and the owner has filed for bankruptcy, is it possible for myself and the other affected tenants to take any legal action?

Anyone can take legal action on anyone. Problem is if you win how do you collect? this person cant even make his house payments

 

[saltydog]

Thank you for your response!

Let me clarify my question regarding fraud. If we signed a one-year contract to lease a house that the owner knew was in foreclosure, but the owner neglected to tell us that the house was in foreclosure prior to signing the lease, doesn't that constitute fraud? If the owner knew that he couldn't keep his end of the bargain and misled us to believe that we would be able to lease the house for one year (as long as we did not break the terms of the contract...which we did not do) BEFORE we signed the contract, is that not fraudulent on the owner's part? We were greatly misled when we signed the lease and never informed about the foreclosure until it was too late. Isn't it the owner's legal responsibility to tell us that the home is in foreclosure, ESPECIALLY before we sign a contract to lease the house for a whole year? If this isn't fraud, are there any other laws that the owner broke?