Foreclosure in 92679>Question Details

Jbogue, Other/Just Looking in Dove Canyon, CA

my landlord is broker/agent. he executed a 12 month lease with us AFTER he know he was in forclosure. Is this legal?

Asked by Jbogue, Dove Canyon, CA Mon Mar 15, 2010

the notice of default was issued february 2009. we executed the lease september 2009. Is he legally allowed to do this without telling us?

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It's important that you speak with an attorney, as my fine compatriots have stated. That being said, there are a few factoids...issues to be aware of and look at as they may or may not have bearing on your situation. First, if you have a bonafide lease, and it sounds as if you do, since you made it in good faith, and were not in "cahoots" with your landlord to defraud the bank, you would fall under the new protection of the legislation passed called, "Helping Families Save Their Home Act". The link to this legislation is below. In a nutshell, the bank must honor your lease if, in fact, the property is foreclosed upon.

Your landlord may actually have proactively taken action to protect your rights, and his position. By having an executed bonafide lease in place, his lender may very well be disinclined to take sudden and aggressive action against him in foreclosure, and may be more apt to consider a work out program to avoid foreclosure. Since the bank would have to take your home back, subject to your lease, and therefore would have to either hold the home - possibly using a court appointed receiver for the rents, or at the minimum, incur additional costs and liability for managing a rental vs a vacant house - or barring that would have to sell to an investor for significantly less than fair market value in order to find someone willing to take the risk of eviction on - the bank has far more incentive to work with your landord.

I suggest that you speak to your landlord. Consider the possiblity that he is actually helping you, and see if you can be a good team here to help both of your causes.
0 votes Thank Flag Link Tue Mar 16, 2010
My opinion is that it is two mutually exclusive events. It sounds like he was current when the lease was signed and after that he defaulted on the loan. The fact that the landord has defaluted and is foreclosure is good you know , but I am not sure that there is any legal remedy. I am thinking any lawyer fees would eat up any potential settlement (if any).

The best answer for legal issues would be an real estate attonrey.

Good Luck

Keith Manson
First Weber Group
Certified Distressed Property Expert
Metro Milwaukee


http://www.milwaukeebailout.com
0 votes Thank Flag Link Tue Mar 16, 2010
Kathy, do you have a link to support your statement? It seems dangerously close to being legal advice.

I personally don't think that it is quite that "cut and dry", and that there are some other possible conclusions, but I wouldn't presume to give legal advice on such a matter.
0 votes Thank Flag Link Mon Mar 15, 2010
Hi Jbogue-

Either way you are protected by the new Tenant Law which states that your Lease has to be honored. If the house is foreclosed on and someone knocks on your door as the new owner or their representative just keep a copy of your lease handy to give them and they will be your new property manager. They must honor your lease if it is bonafide and in writing.
0 votes Thank Flag Link Mon Mar 15, 2010
J -

Didn't we answer this already? In addition to my previous answer in the link below, you should contact an attorney.

http://www.trulia.com/voices/Foreclosure/can_a_landlord_exec…

Thom Colby
Broker / REALTOR
Southern CA

"Moving Lives Forward"
Web Reference: http://www.thomcolby.com
0 votes Thank Flag Link Mon Mar 15, 2010
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