Landlord in foreclosure

I found out that the property I live in and rent is in forecloseure two times and will be sold on April 3rd and May 1st. I received a letter from a law firm addressed to the tenant/occupant of my address and I was greeted at my door by a sheriff who was posting the property with a foreclosure announcement for my landlord. This is the third time within a year that this has happened. My landord failed to notify me at anytime when it was happening last spring as well as the two recent foreclosures. Apparently she got out of the foreclosure in 2007.

When I notified my landlord of the recent correspondences I received regarding foreclosure she finally admitted to the two recent ones but never brought up the 2007 nor did I. She stated that the two now are really only one foreclosure which is lie because there is one from Bank of America and one from her Homeowners Association.

My question is am I held liable to pay her the money for my next month's rent or should I deal directly with the law firm who notified me as her tenant? I found out that she has not paid the mortgage on the rental property I live in since September 2007. Her last payment was August 2007. Isn't she legally obligated to me to be paying the mortgage on her rental property that I reside in. I DO NOT want to pay her. I want it to be paid to someone who will pay the mortgage such asthe law firm handling the case.

When I called my landlord she came up with some excuse and said it would be paid and would not go into foreclosure status. She promised to make copies of all her attemps and success to pay the mortgage in full as far as what she owes so far.

The questions I need legal advice on are: 1. Should I pay her directly since she has not paid the mortgage since August 2007, as well as she is not paying her Homeowners Association dues (two foreclosures)?, 2. What are my rights as far as giving notice to no longer rent? I have lived in her property for almost 3 years and only had a lease the 1st year. 3. What are my rights in getting back my security deposit? The rental property I live in is in better condition than when I moved in due to my upkeep not hers.

Thank you,

mnatoli@carolina.rr.com

[OHlandlord]

1. Should I pay her directly since she has not paid the mortgage since August 2007, as well as she is not paying her Homeowners Association dues (two foreclosures)?,

Yes, you are still obligated to pay her since she is still the owner on record for the property. Although there are 2 liens on the property it is, in fact, one foreclosure. (They can't foreclose on it in May if it has already been taken back by the bank in April.) The HOA is just CYA in case she pays the mortgage company and stops that suit. She will have to pay both liens to stop foreclosure this time.

2. What are my rights as far as giving notice to no longer rent? I have lived in her property for almost 3 years and only had a lease the 1st year.

If you no longer have a lease, you are considered a month to month tenant. The amount of notice, and when you must give it, depends on your state law. (What state are you in?) Your e-mail says carolina. If in N. Carolina you need only give 7 days notice to terminate unless your original lease required a different amount of time. If in SC, you need to give one month's notice unless your original lease required a different amount of time. You should give this notice on the 1st when you pay rent. If you fail to give notice on or before the 1st, the notice may not legally take effect that month and you might be responsible for another month of rent.

3. What are my rights in getting back my security deposit? The rental property I live in is in better condition than when I moved in due to my upkeep not hers.

Again, this depends on your state. In NC, deposits are required to be kept in a separate account, so your deposit should be secure. In SC, deposits can be co-mingled with the LL's funds and it might be harder to recover it. Either way, when you move out take extensive photos of the unit (dated is a must, digital if possible, but with another camera if you don't have one). Leave the unit spotless, have the carpets cleaned professionally, clean the appliances thoroughly along with the bath. Wash walls if needed to remove spots where pictures have hung. Wipe off baseboards, etc. Leave the unit in such shape that she has nothing to complain about. Leave a forwarding address in writing and get a receipt for the keys when you return them. If she does not return your deposit within your state's time limit (30 days of leaving for both states), or she charges unreasonable deduction from it, please re-post here and we will guide you through the next step.

Yes, I live in NC. Thanks for the advice, it has helped me considerably to take the necessary actions I need to take.

I am in a similar situation in Florida. I entered into the 1 year lease in June, 2007. No problems until two days ago when foreclosure papers were served at the house. Here is the kicker-according to the court documents, my landlord hadn't bothered to pay a dime on his mortgage since May, 2007. Yes, he rented me the house knowing full well he couldn't even afford to keep the darn thing. What I am trying to figure out is whether or not the lease is even valid since my landlord entered the contract in bad faith. I am afraid I will never see my deposit again. I fully understand the law regarding the continuation of payment to the landlord until the house is seized by the bank, but I wonder if his slimy maneuver would make the lease void in the first place.

Originally Posted by Unregistered

I am in a similar situation in Florida. I entered into the 1 year lease in June, 2007. No problems until two days ago when foreclosure papers were served at the house. Here is the kicker-according to the court documents, my landlord hadn't bothered to pay a dime on his mortgage since May, 2007. Yes, he rented me the house knowing full well he couldn't even afford to keep the darn thing. What I am trying to figure out is whether or not the lease is even valid since my landlord entered the contract in bad faith. I am afraid I will never see my deposit again. I fully understand the law regarding the continuation of payment to the landlord until the house is seized by the bank, but I wonder if his slimy maneuver would make the lease void in the first place.

I think the legal term is 'unconscionable action' on the landlord's part in executing a contract he knew he couldn't fulfill

[OHlandlord]

To the new poster: Whether it is moral or not, it is perfectly legal until the house is actually foreclosed on. Until possession of the house has been removed by the bank or the government, it is her property to sell, rent, or whatever. When she entered into this lease she was only one month behind on her mortgage (May to June, 2007). That is not long enough for a foreclosure to be filed. The house was not in foreclosure when the lease was signed, so the lease is valid. As there was no foreclosure in place when the lease was signed, it is not an unconscionable action. (Even if it is in foreclosure, most state's laws still allow the LL to rent it out.) Foreclosure was likely not filed until several months later. Rent must comtinue to be paid until possession of the house is no longer hers.

Perhaps she thought if he could rent it out, she would be able to make the mortgage payments. Maybe some other expenses came up on the house she was living in and she needed to use your rent for it. Regardless, she didn't pay the mortgage and the house is now set for foreclosure. Wait and see if it is actually sold. If not, she may have managed to save it from foreclosure. Many owners pull the house from the foreclosure sale at the last minute. This is not uncommon.

If you are in FL, you may well have a secure deposit. Deposits in that state must be placed in an account. You should have received a notice at lease signing that stated "The security deposit will be held in an (a seperate or LL's interest paying or non-interest paying) account at (bank name & address). Intersts will be paid on this account as follows: (rate, time of payments). A copy of FL Statute 83.49(3), explaining how and when the security deposit will be returned is attached as required by law." This copy should have been attached to your lease. Did you receive this with your lease as was required by state law?

Originally Posted by OHlandlord

To the new poster: Whether it is moral or not, it is perfectly legal until the house is actually foreclosed on. Until possession of the house has been removed by the bank or the government, it is her property to sell, rent, or whatever. When she entered into this lease she was only one month behind on her mortgage (May to June, 2007). That is not long enough for a foreclosure to be filed. The house was not in foreclosure when the lease was signed, so the lease is valid. As there was no foreclosure in place when the lease was signed, it is not an unconscionable action. (Even if it is in foreclosure, most state's laws still allow the LL to rent it out.) Foreclosure was likely not filed until several months later. Rent must comtinue to be paid until possession of the house is no longer hers.

Perhaps she thought if he could rent it out, she would be able to make the mortgage payments. Maybe some other expenses came up on the house she was living in and she needed to use your rent for it. Regardless, she didn't pay the mortgage and the house is now set for foreclosure. Wait and see if it is actually sold. If not, she may have managed to save it from foreclosure. Many owners pull the house from the foreclosure sale at the last minute. This is not uncommon.

If you are in FL, you may well have a secure deposit. Deposits in that state must be placed in an account. You should have received a notice at lease signing that stated "The security deposit will be held in an (a seperate or LL's interest paying or non-interest paying) account at (bank name & address). Intersts will be paid on this account as follows: (rate, time of payments). A copy of FL Statute 83.49(3), explaining how and when the security deposit will be returned is attached as required by law." This copy should have been attached to your lease. Did you receive this with your lease as was required by state law?

You are right, I spoke to a lawyer and the lease is valid. I assure you my landlord's intentions were not noble, he was somebody who swooped here during the real estate craze and helped inflate the bubble that has now burst. He flipped property and got caught holding a few when everything stopped selling. He told me he actually took two HELOs out on the property I occupy, did nothing with the money but rolled it into some other property he is now stuck with. Basically he was a Trump mini me and is now screwed.

At my lawyer's suggestion I will file an answer to the summons with the court as my wife and I are named (John and Jane Doe!) and continue to pay my rent, not to the landlord, but placed into escrow with the clerk of court and inform the court I am confused who should be getting the rent and I intend to stay for three more months. That will prevent the dopey landlord from evicting me and he can hash it out with the court.

I didn't know about the seperate lease account, thanks for the tip, I will review my lease (again).

OHlandlord-there is no such language in my lease regarding the security deposit, just some generic language.

[OHlandlord]

Make sure you list this in your answer to the court. He may be trying to pull a fast one and get out of paying you back your deposit by listing you as a "creditor" when he ends up filing for BK. If your lease is recent, this language was required per state law!

Originally Posted by OHlandlord

Make sure you list this in your answer to the court. He may be trying to pull a fast one and get out of paying you back your deposit by listing you as a "creditor" when he ends up filing for BK. If your lease is recent, this language was required per state law!

Thanks for the tip. I did a bit more digging-the property I occupy is one of four he owns that is currently undergoing foreclsure. Ouch.