Foreclosure in 94954>Question Details

2collegegirls, Renter in 94954

We are renting a house that is in the foreclosure process, and the house is going to auction on nov 3. Do we pay rent for this month?

Asked by 2collegegirls, 94954 Mon Oct 31, 2011

Usually we pay rent to our land lord by the 5th of the month but we do not want to pay rent to someone who doesn't own the house anymore if we are not going to get our security deposit back. Everything we have read is confusing. We are college kids that feel we are being taken advantage of, we would just like some professional advice.

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How'd it go? Did it sell 11/3? Somebody will be contacting you, usually a realtor, to entice you to move out of a house now owned by the bank. Called "cash for keys" you would still be entitled to money to help you relocate.

If staying as long as you can is the goal, California favors tenants and will require new owner (bank) to abide. Y any lease you have in place. Depends on your situation. Check with someone you trust for answers.
0 votes Thank Flag Link Fri Dec 9, 2011
This is more of a legal question.
I can give you opinions.
By law you should be paying your rent to the owner or manager of the property.
If you know you wil never see your deposit again and you wish to risk it you can
usually you pay rent for the month of meaning if you pay rent for NOV. So if the owner is gone, and you wish to risk not paying your rent and you understand that things can happen according to the law and your lease,...
If it were me, I probably would not pay either. I would say to the previous owner if asked for the rent. is there an escrow account for my deposit? I need your contact info to possibly sue you to get my deposit back. It is my understanding, you will only be owning the property until til 4pm the 3rd so if you want rent for 2.5 days I can prorate it and pay 10% of the rent. Thats just me.
Then I would send a letter demanding the deposit back on the day the old owner no longer owns the property demanding the deposit back. You will probably need it soon as you will possibly be moving in the next couple of months.

You should read the tenants rights - California - and possibly ask a real estate attorney.
We can not give legal advice. perhaps you can find a legal blog and ask.

Harold Sharpe - Broker
So Cal Homes Realty
(951) 821-8211
California Department of Real Estate Broker License # 01312992
0 votes Thank Flag Link Sun Nov 6, 2011
Assuming the sale went through on 11/03 as scheduled, you should soon be informed as to whether a private party bought the home, or it went back to the bank. If the bank took the home back, you will be contacted by the Realtor assigned as the listing agent to bring the home to market. You will most likely receive a letter either at your door or in the mail asking you to contact the listing agent assigned. DO NOT ignore this letter.....and do not simply move out. Most banks will work with you to provide you time to get out, and more importantly FUNDS to ease your move, if you are willing to move in a timely manner and leave the home clean and intact. We've had the bank offer as much as $7500.00 to a tenant in a move out agreement. This is definitely the high end...we've also seen them offer $2500.00. If you choose to not accept the money, they will start eviction procedings and you, by law, have 90 days to move. ...Most people opt for the money. If a third party bought the home, they will be much harder to work with, but you do still have some rights as a tenant by California law....whereas homeowners can be given a 3 day notice to quit upon the sale to a private party. Contact Sonoma County Legal Aid, or an attorney (if you need a referral, I can point you in the right direction) If there was a property manager, they should still have your deposit, and you can deal with them directly. If your landlord was holding the deposit, you can most likely kiss it goodbye. Kathy mentioned the radio. Mike Kelly and I host The Real Estate Hour on 1350am, KSRO on Sundays 9-10am....for over 16 years. We also list properties for several banks and we're very familiar with the tenant and former owner move out process. We'd be glad to answer any questions you have, on or off the air.
0 votes Thank Flag Link Sat Nov 5, 2011
Both CJ and Terry have answered well. But you can call radio station KGO's lawyer Len Tillem ( weekdays at noon to get some free legal advice. I think KZST also has a free legal line.
0 votes Thank Flag Link Tue Nov 1, 2011
You really need to find out what your legal rights and obligations are. If you followed some of the advice here while living in New Jersey you would be breaking the law, however I am completely ignorant as to California law! Try checking with your State Department of Community Affairs for some guidance, or consult a lawyer. It is very possible your landlord is seeking a mortgage modification, in which case, it is also possible that the auction sale date will be re-scheduled and postponed several times during negotiations. That does not mean your landlord is a crook, or a deadbeat or any of the other nasty names we like to call owners in distress these days, it simply means they are negotating with the bank to reduce their own mortgage payments so they won't lose the home and end up with a foreclosure or short sale on their credit report. If the 3rd comes and goes, and your landlord is still the legal owner, you should pay the rent on the 5th.

Also, not sure of California law, but in New Jersey your security deposit MUST BE transferred to the new owner, even if that owner is the bank, when and if ownership transfers. If it does NOT transfer for some reason, you have legal recourse against the landlord in small claims court and sometimes, is the case here in NJ, there are additional penalties for landlords who break the rules. So, again, you need to know what the law says in California.

Good Luck, it's probably not nearly as bad a situation as you may think.
0 votes Thank Flag Link Tue Nov 1, 2011
Well, the home does belong to the owner until the date of the foreclosure. But, since the foreclosure is going to occur on Thursday, the owner cannot effectively take any course of action against you before the foreclosure date. The new owner (or the bank that forecloses) will send a representative to work with you and make an arrangement for you to either continue to rent or to move out. Good luck. Tough situation for 'college kids' ;-)
0 votes Thank Flag Link Mon Oct 31, 2011
I would talk to the owner, yes, that's right, the owners, until the foreclosure it is still technically their house. Ask them if that are trying to negotiate a modification or doing a short sale, and just don't have a fFor Sale sign up. Also google your address and see if it's for sale! If they are doing a short sale, you should be eligible for cash for keys, a program to give you $3K to move out. But you have to find out if the owners applied for it, and get it writing for them to give it to you. If they get a postponement on the foreclosure and you don't pay the rent and are on a month to month rental agreement, they can evict you and you won't get the $3K if it's available. So, I would talk to them first, like before you give them any rent money! Best Terry Bell, Realtor, Santa Rosa, CA
0 votes Thank Flag Link Mon Oct 31, 2011
You are and have definitely been taken advantage of by a landlord not afraid to accept rent while not paying the mortgage. It's called "rent skimming" and is illegal. However, I've never heard of a landlord getting in trouble for it from the bank, more's the shame.

At this time, do not pay any more rent. You will likely not see your security deposit either and may even be pressured to move out quickly. After the auction sale, whether a bank takes it back, or someone buys it for cash, as a tenant, you will have at least some time to move out and probably an offer of 'cash for keys'. That means the new owner will pay you to move out in a timely manner and leave the place in decent shape. Typically it's $1500 or so, sometimes more, sometimes less. It can't hurt to negotiate and insist on more time if you need it and more money to move out sooner.

New owners really don't want to fight you, and as a tenant you do have rights, for example a 60 day notice to move out if you've lived there over 1 year. It's 30 days for less than a year. So if the new owner offers to pay you $1500 to move out in 2 weeks, tell them you'll do that for $2500 or leave in 30 days for $1500 - something like that. Whatever seems to work best for you.

For the next place you consider renting, do not hesitate to contact me with the address and I can quickly tell you if that owner is in foreclosure default or not. Considering the foreclosure process can take as long as 18 months (banks are overwhelmed), that's a lot of rent skimming with you on the losing end.

Once burnt, twice shy, as they say. Very good luck to you. cj
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0 votes Thank Flag Link Mon Oct 31, 2011
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