Is it legal in FL to rent a house that is in the short sale process?

Asked by, 32746 Mon Mar 23, 2009

I am considering renting a house that is beginning the short sale process. I know I have to show the house and move if it is sold. I may make an offer. Is this a good idea?

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Marty Hunt, Agent, Altamonte Springs, FL
Mon Mar 23, 2009
As long as you know the risks and are willing to do it, there's probably nothing illegal about the owner renting the property to you. If the owner is collecting rent from you and not making the payment, that might become an issue for the owner. I'd also ask how close to foreclosure the seller is so you might have some idea how many months before you have to move again!

Also, as a matter of disclosure, I'm not an attorney and I'm not giving legal advice so if it's legal advice you need, I'd recommend that you consult an attorney. There's no great answers about short sales because although there are some things that are similar, there are also many variables from one short sale to the next!

Good luck with your decision. If you're interest in seeing all bank owned properties, corporate owned, pre-foreclosures, foreclosures and short sales go to and click on the big "Foreclosure" tab on the home page.

Marty Hunt
Realty Executives Seminole
1 vote
Bill Eckler, Agent, Venice, FL
Wed Mar 13, 2013
Absolutely....the home is the possession of the present owner until he bank legally assumes ownership through foreclosure.

Knowing the direction this home is heading, it would be wise to find out what the anticipated timeline on their short sale would be...this is something most often easier said than done however. In these situations it's often a race to the finish between a foreclosure and a short sale. Either way your stay could be shortened by either process. With this said, knowing the conditions this scenario presents could offer you some negotiation power to achieve a good monthly rental break.

Oh, did I mention that as a renter in this situation you can probably plan on regular interuptions by potential buyers wishing to view the property...this again, another negotiations chip.

Either process could take weeks, months or even years....depending on where they are in the process and their level of representation. Be sure you have a clear appreciation of where the owner stands in this process.

Good luck.

0 votes
Mel Bernstein, Agent, Lake Mary, FL
Wed Mar 13, 2013
Full disclosure is the key to avoiding any issues. There are a number of fairly priced real estate attorneys that can guide you through this process. I personally like to use as a resource.
0 votes
Dennis Burge…, Agent, Orlando, FL
Fri May 11, 2012
The simple, non-legal-advice answer here is "no". An extended answer would be "heck, no!"

Is it LEGAL for you to rent a home in the midst of foreclosure? Sure- you'd be doing nothing illegal. Is it legal for the owner to rent it to you? Again, the answer is in the affirmative. After all, the home's owner remains its owner unless and until the gavel falls at an actual foreclosure sale- and they can do with their place as they wish.

Is it ETHICAL for the owner to rent it to you? Perhaps, with a caveat: if they've fully disclosed the status of the home and you choose to rent it anyway, you assume the burden of having made a poor decision. What you CAN'T worry about is whether you're paying the owner rent with them not paying the mortgage. The lease that both of you share, the rent that YOU owe, and the mortgage that is HIS responsibility can't be mixed together. You simply have to decide whether you'd like to roll the dice and ride things out.

In deciding, weigh the fact that you WON'T be afforded any protections under the Protecting Tenants at Foreclosure Act of 2009. This law gives those in bona fide leases prior to the commencement of foreclosure proceedings certain protections- but entering into a lease for a property already in foreclosure could potentially leave you (literally) out in the cold.

I won't lease out a place that's in foreclosure, and I'll give up management of properties falling into foreclosure in the middle of a lease term at said lease's expiration rather than renew a tenant under the weight and uncertainty that the foreclosure process brings- and won't look to acquire a new, unprotected tenant. It's simply the right thing to do.

If considering renting AT ALL, I advise everyone to learn who owns the property they're interested in. Here in Florida, one can visit the local property appraiser's site and get their names. With names in hand, visit the Clerk of the Court's website for the county the property sits in, and search for any legal proceedings against the owners. You're looking for the filing of a "lis pendens" (typically coded with an "LP") that signifies the beginnings of foreclosure.

Choose wisely, and be prepared to accept the consequences of your choices should you make unwise ones.

Hope this helps some folks. Feel free to contact me with any questions you might have.
0 votes
Kat Hopkins, , Altamonte Springs, FL
Wed Sep 15, 2010
This is an extremely personal question.For some it might be more than they would want to deal with. But if you are aware of everything that is involved and can develop a good relationship with the listing agent it might just work for you. As far as whether or not it is legal for the owner to rent to you only a real estate attorney could answer that question. Keep in mind that whether or not the owner is using the rent to pay the mortgage,it is still your legal responsibility to pay your rent in accordance with the terms of your lease. For more information on distressed properties and short sales please visit my website @
click on the Buyers tab and choose forclosures
Kat Hopkins
The Realty Factor
Altamonte Springs
0 votes
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