Rentals in Brea>Question Details

Jerry Relth, Renter in Los Angeles, CA

My landlord has been collecting rent and not paying the mortgage, so the home is going into foreclosure. Is she breaking the law by collecting rent?

Asked by Jerry Relth, Los Angeles, CA Fri Mar 23, 2012

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Hello Jerry,

Up and util the banks takes the proerty through foreclosure, your landlord is still the owner.
You have a contract with the landlord to pay a set amount of monthly rent. Be very careful . If you fail to pay your rent the landlord could begin the eviction process. The last thing you want is an eviction on your credit history.

Remember, the loandlord's bank could take anywheer from 90 days to SEVERAL months to actually foreclose on the property, in the meantime if you reside there you must pay your rent.

If you are worried about the situation with th eproperty, you should give your 30 day notice and move out on your own accord.

Best of Luck to YOU,

Kawain Payne, Realtor
2 votes Thank Flag Link Tue May 29, 2012
No. Each month on the 1st, you pay your rent. In exchange, you are provided housing for that month. Has the landlord taken your money and denied you housing? LIkely not.
If you have a written lease, and you are not related to the landlord, and the bank forecloses, you should be able to remain through the end of the lease.

I am not an attorney and my opinion should not be interpreted as legal advice, it is not.

Best of luck,

Thom Colby
Newport Beach & Palm Desert CA
2 votes Thank Flag Link Fri Mar 23, 2012
Mr. Colby, you should know better!! The implied warranty of habitability directly effects any obligation for a tenant to pay rent - not just words, but the law and 9th district case law. Most fools that let houses go into foreclosure also neglect 'underlying' obligations.. not just the mortgage.. the maintenance. Leaking plumbing, leaking showers into hallways.. black mold growth... all occur.. Why or how would I know? It is now, because a Broker/Property Manager let it and let a scumbag get away with modifications//short sales to relatives knowing they would never pay or fix anything. My rent is escrowed and a guy like you just lost in court. Good luck with that attitude. You have no info but a sarcastic unprofessional response. Good luck with advertising your phone number.
Flag Wed Jan 29, 2014
You should hunt down said landlord and, I don't know....perform an adjustment. Too many f**kbag LL's "invest" in a property and expect you to pay their moneys owed to the bank without providing any real service. Most here will argue "I put the money and am providing a place to live" blah blah blah. Guess what, I've also paid for the house you now get to sell and take all profit from (interest losses are your fault a**hole, not mine). Now, if you're paying someone and they actually provide a real service to you and aren't seeking 400% profit to do nothing, maybe it's legitimate. But that's far and few between. IMO, renting property should be like investing in stocks. Minus services rendered and risks associated with loans taken by the LL, each renter, whether past or present, should own stake in the property (much like owning stock in the company) so that all amounts paid that aren't associated with services rendered or LL risk are actually returned to the renter upon sale etc. Let's see how many d**kbag/dishonest pure capitalists flame me on this one!
1 vote Thank Flag Link Tue Jan 28, 2014
Hi Jerry,

No, your landlord is not breaking the law in collecting rent. Your lease is with the landlord, not her mortgage company.

Best regards,

Elva Wormley
C2 Financial Corporation
(408) 615-8500
1 vote Thank Flag Link Fri Mar 23, 2012
Hello Jerry,

Unfortunately, No. The contract you have with the landlord is between you and the landlord and the contract the landlord has with their lender is between them. The fact the landlord is breaking that contract does not affect this one.

You should have a Realtor or someone watch the auction date for the home you are renting, you do not want to get surprised by a sheriff telling you to move NOW. You are in a tough spot but you are still obligated by your contract. See if you can end the lease early and move.

Good luck,
Brian Wilson, Realtor
DRE# 01321478
1 vote Thank Flag Link Fri Mar 23, 2012
*** I have a question related to this:
I signed a lease with a so-called property manager. Really just a glorified neighbor.
I have not once spoken to the landlord. Who has moved out of state. The bank has come out to the house and said its in foreclosure, and that if they were me they would suggest for my familys sake for me to move out before 2months is up. All of their attempts at contacting her have been null. The mortgage is not being paid for months now, but my rent has. I cannot move without getting my deposit back or not paying rent. Im very anxious as a single mother. I have also received a letter from the home insurance company saying that the insurance hasn't been paid and that in the underlying terms of her mortgage she must pay for home insurance. My lease does not have the landlord's name anywhere on it. Everything was done through this so called property manager. Nothing has been fixed when I have requested. The landlord didn't come down to meet me the week after signing my lease like I was told she would. Im feeling like the whole thing is a big scam. The bank field agents Ive spoken to said they see this all the time.
0 votes Thank Flag Link Wed Mar 2, 2016
How long has your landlord owned the property? It depends. If she's owned it for more than a year, there would appear to be no violation of civil code 890, rent skimming.

Some intense poster below tries to align rent skimming to the "Implied warranty of habitability" which to me is a comparison of apples to oranges. One does not necessarily have anything to do with the other.

There also has to be the intent to defraud. There are many defenses to the allegation of rent skimming.

I suspect your issue is more associated with how her lack of payment to the lender/servicer is going to impact you. the answer is that you are still obligated to pay, whether she does or not. You can't use her lack of payment as an excuse for you not to pay. You have protections under California and Federal laws from eviction if the lender forecloses as long as you can document you are paying rent. If the foreclosure does occur, you will have a minimum of 90 days to vacate the premises or, the remainder of any bonafide lease, whichever is greater, provided you pay rent.
0 votes Thank Flag Link Mon May 5, 2014
Notice all the licensed Real Estate agents and brokers all not even looking at my post that gives the law for this? It is a crime. Read down below and see the PENAL CODE. The one these brokers don't even know in their own state. Rent Skimming is illegal, do it 5 or more times and it's a felony. Good Luck to all those that have bankrupted the country.. as in all of you agents that don't even know the law and give bad advice that only helps your clients and not the guy needing help here. Tommy is obviously upset.... his response I do not blame him for - I blame the frauds like the owners and agents and brokers that knowingly allow this. Nail them on the Implied Warranty of Habitability.. it doesn't have to be in a lease or rental agreement - it's automatically written into them due to fed court decisions from long ago... ones these guys should know but don't. Sad a renter knows more then a broker on this issue...
0 votes Thank Flag Link Wed Jan 29, 2014
Hi Mike, you are venting your hatred in the wrong direction. A challenge for you; pick up any of numerous books on the 2008 financial crisis, in any corner of the world, read, learn, & you will find what the actual cause for the financial crisis. Actually, the government, the federal reserve, & the financial institutions create bubbles throughout time, over & over & profit greatly. Also, a bigger one is coming by compliments of the same group so get reading. You have great passion but should re-direct it for your own good.
Flag Mon Sep 29, 2014
Mike, ease up on the RedBull.
Flag Mon May 5, 2014
YES, she is. All the broker responses here seem to be like those same people that buy houses and don't pay mortgage or keep 'Habitable'... for that reason... 'lack of habitability/maintenance' the renter DOES NOT have to pay the scumbag that doesn't pay the mortgage.. simply put the funds into a bank account or escrow it with an attorney... No landlord in foreclosure with a ran down junk home they don't care for will win an unlawful detainer action to evict in court - if you do get in court simply ask them if they've paid the mortgage, done any maintenance, etc.. and bring pictures... because these guys giving advice here act just like the property manager did that allowed all this. Advertisement for them with their phone numbers and locations? More like a good reason for anyone reading to never go to them.
0 votes Thank Flag Link Wed Jan 29, 2014
This is called "Rent Skimming" within CA. Civil Code 890
0 votes Thank Flag Link Fri Oct 4, 2013
I'm quite surprised that all these brokers and agents in California don't even know the law. Civil Code 890: 890. (a) (1) "Rent skimming" means using revenue received from the
rental of a parcel of residential real property at any time during
the first year period after acquiring that property without first
applying the revenue or an equivalent amount to the payments due on
all mortgages and deeds of trust encumbering that property.
(2) For purposes of this section, "rent skimming" also means
receiving revenue from the rental of a parcel of residential real
property where the person receiving that revenue, without the consent
of the owner or owner's agent, asserted possession or ownership of
the residential property, whether under a false claim of title, by
trespass, or any other unauthorized means, rented the property to
another, and collected rents from the other person for the rental of
the property. This paragraph does not apply to any tenant, subtenant,
lessee, sublessee, or assignee, nor to any other hirer having a
lawful occupancy interest in the residential dwelling.
(b) "Multiple acts of rent skimming" means knowingly and willfully
rent skimming with respect to each of five or more parcels of
residential real property acquired within any two-year period.
(c) "Person" means any natural person, any form of business
organization, its officers and directors, and any natural person who
authorizes rent skimming or who, being in a position of control,
fails to prevent another from rent skimming.
Flag Fri Oct 4, 2013
Hi Jerry,
The owner has an agreement with the bank that is not tied to the agreement he has made with you. You are still obligated to pay the rent even if he is not making his mortgage payments. He may get a loan modification or the home may end up in foreclosure. You should consult an attorney for more information.
0 votes Thank Flag Link Mon May 21, 2012
Sadly, you have a contract with your landlord, not his bank. Good luck to you.
0 votes Thank Flag Link Fri Mar 23, 2012
another vote for NO she is probably not breaking the law
0 votes Thank Flag Link Fri Mar 23, 2012

You have a contract--a lease agreement--with your landlord. You pay rent; she provides you a place to live.

She has an agreement with her lender(s). She pays the rent and they don't foreclose.

But there's nothing that requires her--either in the lease or in the law--to pay her mortgage.

The two are completely separate.
0 votes Thank Flag Link Fri Mar 23, 2012
Don Tepper, Real Estate Pro in Burke, VA
Hello Jerry !
I believe the law only governs the first 12 months of the new loan (whether purchase or refinance). After that, I believe the landlord can collect rent regardless of whether mortgage is current or not.

For further information and clarification, please call your local housing authority @ 866-557-7368

I know this is of little consolance, but if you've lived there at least 12 months, and IF the home actually ends up on the auction block, then the new owner must honor the existing lease. If you are on a month to month contract, and over 12 months, then the new owner must provide a minimum of 60 day notice to vacate.

â–º Have you considered buying ??? With the new grants, a first time buyer may qualify for 0.5% down < $500 down for every $100,000 of purchase price >. Qualifying is about as hard as qualifying to rent a home with the right agent and loan officer working for you. -Oh, and you might end up paying LESS in mortgage than RENT !!! Lastly you have additional tax write offs, which either give you a larger tax refund at year end or you can lower your monthly liabilities to have a bigger paycheck !

Jerry - it doesn't cost you anything to get you prequalified for a mortgage and its done in complete privacy... heck, you could just say goodbye to renting forever !!!!

Don't know of a good realtor in your area, let me know and I can recommend one to you !!!

Most Kindest Regards,
Mario Gonzalez
JD Power & Associates Ranked #1 Buyer Satisfaction 2008, 2009, 2010
Chase Bank Preferred Agent 2008, 2009, 2010, 2011
Short Sale & Pre-Foreclosure Certified *
REO Buyer Agent & Distressed Property Certified
DRE LIC 01708214
0 votes Thank Flag Link Fri Mar 23, 2012
I also agree with Matthew as an option
0 votes Thank Flag Link Fri Mar 23, 2012
Technically no, she's just allowing the bank to go thru the foreclosure process, no doubt defaulting on her loan. She's waiting for them to kick her out, which has been taking so long these days. Hope this helps...
0 votes Thank Flag Link Fri Mar 23, 2012
Hi Jerry,

No, she is not breaking the law. A homeowner is free to essentially do anything they want with the home since they own the property. One option that sometimes occurs is that the homeowner will sell the home to the current occupants through a short sale.
0 votes Thank Flag Link Fri Mar 23, 2012
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