Foreclosure in Surprise>Question Details

Alison, Other/Just Looking in Garcia, CO

We are renting a house, if we receive a notice of foreclosure can we stop paying rent at that time?

Asked by Alison, Garcia, CO Sat Oct 25, 2008

We rented a house in July 2008. The owner is an investment company. The point of contact advised us that their loan "expired" in May. They got a 90 day extension, however the appraisal came back too low so the extension voided. The investment company is trying to extend the loan however their noteholder rejected the extension. The investment company has made offers from private investors however the noteholder rejected them.
It seems as though this house may foreclose. If we get a foreclosure notice on the house, can we then stop paying rent? Also, how long do we have until we have to move out? Will that be considered an eviction? Our rental contract states the landlord shall not allow the premises to be subject of a trustee's sale (breach of contract).

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There was a similar question asked earlier. My answer then would be the same now.

"On May 20th of this year, the President signed the "Protecting Tenants at Foreclosure Act of 2009" which provides that leases would survive a foreclosure. Which means the tenant could stay at least until the end of the lease, and that month-to-month tenants would be entitled to 90 days' notice before having to move out.

An exception was included for the buyer who intends to live on the property. The buyer may terminate a lease with 90 days' notice. Importantly, the law provides that any state legislation that is more generous to tenants will not be preempted by the federal law. These protections apply to Section 8 tenants also.

Change of ownership does not justify a termination of lease, the fact that the change occurred through foreclosure, will not justify a termination of the lease."

As for not paying rent - that's not a good idea. It can very well create problems for you down the road.
0 votes Thank Flag Link Sat Jun 6, 2009
Hello Alison. Your question should be answered by an AZ attorney as it involves legal advise. You are asking what your legal remedy is if the landlord lets the property go into foreclosure. Can you live in the house for free if the landlord defaults on the loan? Does one breach of contract justify another (i.e., stop paying rent?). How will you get your deposit back? Could the landlord have a claim against you because failure to pay rent may contribute to him not being able to come current on the loan or affect his ability to find a loan because there's no proof of rental income. Those are all very interesting questions. I hope you can see why you need to consult with an attorney.
0 votes Thank Flag Link Sat Oct 25, 2008
Ute Ferdig -…, Real Estate Pro in New Castle, DE
MVP'08
Contact
Alison,

Are you in surprise Arizona?

If so, there should have been documentation provided to you by the landlord describing the conditions of your lease.

also, a notice of foreclosure on the home means you need to move out as the bank will evict you anyway. So, not knowing the terms or conditions of course, but based on what you are telling me I would start looking for another place to rent.

There are a couple more things I might be able to suggest, but that would require direct contact and you would need to live here in Arizona for me to be able to properly direct you.

Here is my contact information,

Stew Keene

Stewkeene@yahoo.com
Web Reference: http://www.stewkeene.com
0 votes Thank Flag Link Sat Oct 25, 2008
Alison,

My name is Andre Shambley and I'm a licensed Realtor with The Keyes Company in Miami, FL. Please call me to discuss your current situation more in depth.

Andre Shambley
http://www.Keyes.com/Andre.Shambley
AndreShambley@keyes.com
Office: 305-931-8920 ext 245
Mobile: 305-788-6643
Fax: 305-931-9853

"Given the degree of exposure I can provide, if I can't sell your home...no one can!"


Aventura
2822 NE 187 Street
Aventura, FL 33180

Interested in condos, visit me at: http://www.Keyes.com/Andre.Shambley

Want to refinance your home and lock in a fixed rate while rates are low, visit: http://www.JShambley.ApexLending.com
0 votes Thank Flag Link Sat Oct 25, 2008
First and foremost, I sorry to hear about your unfortunate situation. It is best that you consult with a real estate attorney regarding any legal issues.

You should continue to pay rent so that you are not in breach of the lease agreement. The notice of trustee sale is typically issued 90 days prior to the trustee sales date. The landlord has up to the day of the trustee sale to reinstate the deed of trust by paying what is owed including and penalties and trustee fees.

Regarding an eviction; if the trustee sale takes place, regardless of who becomes the new owner, at that time you will have to leave. Otherwise a forceable detainer can be issued against you.

I would talk with whoever is the point of contact for the landlord and find out how secure your deposits are. If the landlord is foreclosed on, you may have a difficult time recovering your deposits when you vacate.

Again, please consult with a real estate attorney for legal advice concerning you situation.
Web Reference: http://www.jameswehner.com
0 votes Thank Flag Link Sat Oct 25, 2008
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