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Caryn, Other/Just Looking in San Marcos, CA

I am renting a townhome in San Marcos and was just advised that it is up for a short sale.

Asked by Caryn, San Marcos, CA Sun Feb 15, 2009

I have a lease till July 1st. Is it valid? What about my security deposit?

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A written lease for a definite period is valid for the period stated unless and until a house is sold. Then the lease terminates by operation of law and the tenant then becomes a holdover tenant and can remain in possession of the premises at the pleasure of the new owner as long as both parties agree. A month to month tenancy is created by this arrangement. It is no different than any month to month tenancy and requires notice of termination by the landlord to end the tenancy. Your security deposit is held by the new owner and must be returned pursuant to the terms of the written lease agreement.
0 votes Thank Flag Link Wed Jul 22, 2009
If your lease is up in July 1, 2009...yes the short sale is valid as it will not sell before your lease expires and you will get your deposit back as long as you have taken care of the home and there are not issues preventing the landlord from releasing your funds. A short sale takes months to close. I would not suggest renewing unless you go month to month and you keep your eyes wide open as you will have to move.

Good luck
0 votes Thank Flag Link Sat Jun 27, 2009
Hi Caryn,

This is becoming more common than you realize. It could take a very long time for the short sale to take place and we don't know where your home is in the process. Be sure to check out the legal website posted below. Your owner may stop making payments on the mortgage but you are still obligated to pay the rent. It is possible that your tenancy could run to the end of your lease as lenders are still taking a long time for short sales. So, do your homework and make an informed decision. You might try to renegotiate your lease to put up with the hassles of showing your condo. If your owner isn't making the mortgage, he should be able to give you your deposit back. Would you rather stay or go? Good luck!

Diane Conaway, RE/MAX United, (760) 749-2888
0 votes Thank Flag Link Mon Feb 16, 2009
Your lease would run until either a) the bank forecloses on the property, or b) you negotiate to get out of it. If the bank forecloses, you have 60 days notice (new law - it used to be 30 days). But you can try to negotiate out of it. You should be able to get your deposit back.
0 votes Thank Flag Link Mon Feb 16, 2009
Sorry Caryn. There is so much that can happen or might be happening with the property owners. Is the condo in default? Have the owners filed a BK? Will they let you out of your lease; give you your deposit money back? With this volatile economical time, you may want to contact an attorney who specializes in real estate law. I have pasted a web site for you to browse and hopefully help you in some way. I wish you the best of luck.
Birgit Anglin
Windermere Exclusive Properties
REOexpert@BirgitSellsHomes.com
0 votes Thank Flag Link Mon Feb 16, 2009
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