Actually what happens sounds very familiar in my world since we deal with many short sales, pre-foreclosures, probates, estates, investor owned properties and other deals that can be quite complicated.
Since CA foreclosure laws are different than TX as we are a non-judicial trustee sale state; the thing that should be known is that in TX a lease agreement will supersede any transfer of ownership through a GWD (general warranty deed) that issues ownership through the chain of title w/out any exceptions. However, a substitute warranty deed or a deed that is taken by foreclosure can wipe out the current lease agreement; atleast here in TX anyway. So if the HOA had foreclosed, they did take ownership and had the right to terminate the lease, however it does sound like they kept it there to honor it and make their money back in recouping their foreclosure costs (attorney's, collections, past dues etc). Keep in mind though; they were only foreclosing on a junior lien position, meaning that they could take ownership as long as the senior lien holder didn't foreclose. Now that the senior lien (mortgage) has foreclosed, the change of ownership should have now changed hands again and is no longer in the ownership of the HOA.
Since I'm not a licensed attorney and only speaking in regards to TX laws, you certainly will need to speak to legal counsel there. In my opinion, it does sound like you should start contemplating a move coming very soon and it's up to you or your legal counsel to inform you whether or not to pay your current rent payments until your move.
Hope that helps.
Keller Williams Realty
However, now that you have paid them rent, they may not owe it back to you. Your claim would be with the landlord, not the HOA in my non-legal opinion. They have probably credited your payments against the lien, which was good for them, but not necessarily in your interest....or maybe it was since you got to stay there another year or two.
You might want legal advice...not advice from us. I probably would not pay rent to anyone at this point until you are contacted and a contract/lease in place. You should probably save the rent in case you do have to pay. My guess is your current lease has expired, if it has been two years or more since you originally signed, or you are now on month-to month. So potentially the new owner will want to sign a lease with you....or take possession of the house. If the 2nd scenario then they would have to give you the notice required in your lease if the lease is valid. If you don't have a lease, then it would be according to CA law, I'm guessing 30days...but maybe some of our CA people can jump in on this one. So you also want to be prepared to move. If you are contacted by the new owner...work with them. You don't want them to evict you.....you might be able to stay, but your rent may go up or they might ask you to leave....so you just have to be prepared for that.
The HOA should know who the new owner is and the HOA lien was probably wiped out in the foreclosure or settled. Since you have a relationship with them, you might be proactive and get the contact info for the new owner, contact them before they contact you. Tell them you want to sign a new lease, if that is the case.
By the way if you had a deposit, that is probably gone. You might contact the landlord and ask for it back, but they may not have any money, if they were taking your rent and not paying their mortgage.
Anyway, It does matter that the house has been sold. Here's why:
The people I originally rented from went into foreclosure about 2 years ago, I continued to pay rent, then about a year ago, the HOA bought the lien on the house for $7699. Since then I've been getting mail saying that the house is still in foreclosure. I disregard them because, why do I care who owns the home? For the last year though, I've been paying rent to the HOA. First off, is that right? Should I have been paying them? OH- AND IT GETS BETTER....Yesterday I got a notice on my door that the house was sold at auction to a private buyer Last Friday, FEb 22. The management company that collects my rent for the HOA doesn't know anything about it. I have not been contacted by the new owner or anything. Question 1: Does the HOA owe me rent for the last year as they did not own the house. Question 2: If the house was sold on Feb 22, shouldn't I get a pro-rated credit since they don't own the house. Question 3: Can the new owner make me and my 3 kids leave this house? I don't know anything about realty and just need some help, no sarcasm or negative comments please.