Patrick A. Hale, CDPE, RSD
Real Estate Broker & Investor
REO & SHORT SALE EXPERTS WITH A MISSION TO:
"Help Over 360 Distressed Home Owners Avoid Foreclosure"
If You or Someone You Know is in Financial Distress Visit: http://www.SDRealEstate360.com
I can tell you that the landlord, as long as he still owns the property, has the right to rent it out and collect rent. Of course, it wasn't ethical for him not to advise you of his situation, but it happens here in Las Vegas frequently. Chances are his loan was adjustable and it reset and he could no longer make the payments. This is not illegal.
Tenants who are living in rental properties now have rights. Again, check with a local real estate attorney. If you were planning on suing your landlord, you'd probably be wasting your time because they are having financial difficulty which is why they quit making payments on their loan.
What happens here is the bank that has the mortgage will often send out an asset manager to do an occupancy check. They will ppst a notice that lets you know the property is being foreclosed on. If the property goes to sale on the courthouse steps, one of 3 things can happen:
1- If no one buys the property at auction, the lender will direct their chosen real estate agent or asset manager to come and make you a cash for keys offer, basically offering you money to move in 30 days or less and leave the property in good condition.
2-If an investor buys the property at the auction, in Las Vegas, he is required to honor the terms of the lease of the existing tenant. So if you have 5 months left on your lease, he has to let you stay the remaining 5 months. This means you now pay the new owner the rent. You don't get to live there for free.
3-If someone purchases the property at the auction and they intend to owner occupy, it is there job to negotiate with you so you'll move.
Again, check with a real estate attorney regarding your rights in California as a tenant living in a foreclosed property.
Just from a practical point of view, at least you were living in the home while you were paying rent as opposed to lets say not getting paid back on a loan that someone owed you because they filed bankruptcy.