Renter's rights when landlord defaults

[Help!]

For those of you in the process of Ch. 7, hang in there... there is a much better life awaiting you at the end! It was a rough ride, but it's been 15 months since our discharge. We've managed to get back on our feet again and not take on any new debt. We've stayed in the same rental, faithfully making our payments on time according to our lease-to-own contract. All is going well and now that we have two nickels to rub together.... the builder wants us out and plans to let the house go back to the bank even though our lease agreement is through June 30 of 2010.

This is where I need some serious guru help and the Ch. 7 forum is the only place I can post this question and get an answer I can trust. Can I dig in my heels and wait until the bank takes ownership of the house from the builder and forces me out? The cost of getting into another rental will wipe out the little savings we have. Part of me is tempted to just get out and find another place to live now, but why spend that money until I absolutely have to?

Thoughts??

[nc73]

For those of you in the process of Ch. 7, hang in there... there is a much better life awaiting you at the end! It was a rough ride, but it's been 15 months since our discharge. We've managed to get back on our feet again and not take on any new debt. We've stayed in the same rental, faithfully making our payments on time according to our lease-to-own contract. All is going well and now that we have two nickels to rub together.... the builder wants us out and plans to let the house go back to the bank even though our lease agreement is through June 30 of 2010.

This is where I need some serious guru help and the Ch. 7 forum is the only place I can post this question and get an answer I can trust. Can I dig in my heels and wait until the bank takes ownership of the house from the builder and forces me out? The cost of getting into another rental will wipe out the little savings we have. Part of me is tempted to just get out and find another place to live now, but why spend that money until I absolutely have to?

Thoughts??

All depends on what your lease says. They can only remove you through a court order which involves taking you to court, etc. You could also get them to pay you off, which may work and you can use the money for the next deposit.

[lrprn]

At least your builder gave you notice, Help. There are thousands of renters who find out their landlords have been foreclosed when the sheriff or the bank shows up at the door to evict them.

Read the following NOLO article about the rights of renters in foreclosure - http://www.nolo.com/legal-encycloped...cle-30064.html . It explains the legal positions well and gives good advice about your best options.

Another option not mentioned is to stop paying your lease now for a few months while the foreclosure winds through the courts and save that cash while you search for another rental. Then you can use the saved rent money to finance the move. However, there is risk doing this because you are violating your rental agreement. Depending on how friendly the courts are to landlords where you live, you could find the sheriff at your door with an eviction notice before you can find another place to live. Only you can decide if the risk is worth it.

[ForumReader]

What if a situation arose with a private landlord defaulting on a mortgage and not saying anything to his/her renter while the renter continues to pay the lease and the renter finding out later receiving the eviction notice from the bank or sheriff that he or she must move out by a certain time frame? Is this legal for the landlord not to mention to the renter and continues to take the rent money while his or her mortgage is defaulted and the foreclosing process is taking place?

[UpsideDownMI]

Look closely at your lease agreement and review all clauses related to eviction. As nc73 stated, your landlord will have to take you to court to evict you before the lease expires. Being a former landlord, I can tell you that it is very difficult and time consuming to evict a tenant for any reason other than non-payment of rent. That being said as long as you have and continue to pay your rent on time you should be ok until your lease expires. Once your lease expires, your landlord can simply provide you 30 days notice requesting that you move out.

[UpsideDownMI]

What if a situation arose with a private landlord defaulting on a mortgage and not saying anything to his/her renter while the renter continues to pay the lease and the renter finding out later receiving the eviction notice from the bank or sheriff that he or she must move out by a certain time frame? Is this legal for the landlord not to mention to the renter and continues to take the rent money while his or her mortgage is defaulted and the foreclosing process is taking place?

Unfortunately, this is becoming a more common occurence. In some area's sheriff's have placed a ban on evicting innocent tenants who were unaware that their landlord was in foreclosure.

In any eviction process, the tenant is entitled to a hearing. It doesn't mean the tenant will win, but it will buy the tenant some time.

I can not answer whether or not it's legal for a landlord to do this, but it is definately unethical. A tenant could contact a lawyer to see if there a grounds to take legal action against the landlord.

[ForumReader]

Unfortunately, this is becoming a more common occurence. In some area's sheriff's have placed a ban on evicting innocent tenants who were unaware that their landlord was in foreclosure.

In any eviction process, the tenant is entitled to a hearing. It doesn't mean the tenant will win, but it will buy the tenant some time.

I can not answer whether or not it's legal for a landlord to do this, but it is definately unethical. A tenant could contact a lawyer to see if there a grounds to take legal action against the landlord.

Thanks, just wondering because I am renting a place to a private landlord. I will re-review my lease agreement regarding eviction clauses. Hopefully my landlord is not that kind of person to take my rent money if his mortgage defaults and does not say anything to me!

[Help!]

Thanks for all the info.! I'll read the article and look through my lease agreement again. I think we'll just keep writing those rent checks until the end...

[EbbTide]

I would consult with an attorney who specializes in real estate.

The difference here is you are lease-to-own, with contractual stipulations as to a set amount each month put towards your down payment.

A couple of keywords to look for: Default of parties... and Assignment of Contract.

Please see an attorney well versed in real estate.

[shabam]

What if a situation arose with a private landlord defaulting on a mortgage and not saying anything to his/her renter while the renter continues to pay the lease and the renter finding out later receiving the eviction notice from the bank or sheriff that he or she must move out by a certain time frame? Is this legal for the landlord not to mention to the renter and continues to take the rent money while his or her mortgage is defaulted and the foreclosing process is taking place?

I don't know if it's illegal but I would definitely look at their petition and see if they included this as income. If not, I would advise the trustee and UST of this.

Not to mention stop paying them immediately.

[EbbTide]

Individual State laws vary greatly when it comes to lease-to-own contracts

Texas - as an example.. if there is an existing mortgage on the property, the lender has to authorize the lease-to-own contract it the term of contract is greater than 180 days... the overages going into escrow accounts. Should the seller/builder default on the existing mortgage, the buyer/renter may make payments directly to the lender.


Please, please, please talk to a competent real estate attorney before defaulting on your contract.