Scrutinizing a future landlord...

[Ineedhelp2]

Now that I will soon be homeless as in ownership, and am looking for a rental, it's occurring to me that my landlord could be having problems too.

How can I find out if a potential landlord is current with his mortgage?

What happens to a renter if the owner is foreclosed? If the property is sold, does the bank or the buyer have to honor the lease?

[iv65536]

Which state, please?

[justbroke]

How can I find out if a potential landlord is current with his mortgage?

You can't really other than to make sure the home isn't in foreclosure (check the local Clerk of the Court's website), or the owner isn't in Bankruptcy (or was in Bankruptcy) -- check PACER.

I actually do this now because I almost got burned with an owner who didn't come clean about renting his $1,000,000 home for $1,500 a month. It wasn't until I looked up the foreclosure in the county records and confronted the owner, that he came clean. If I were to rent, I'm a long term renter. I don't like to move every 12 months like some people do.

What happens to a renter if the owner is foreclosed? If the property is sold, does the bank or the buyer have to honor the lease?

Whether your lease remains intact is a State issue. Some States require the buyer to honor the terms of the lease, but this may just mean that they must give you proper notice that the lease is discontinued (30, 60, 90-day notice as required). This would be no different than the owner (pre-foreclosure) ending the lease if there's such a clause.

Again, in some States, and specifically for foreclosures, some States will not even evict a renter from a foreclosed property, if it's initiated by a Bank that foreclosed upon the property So, you much check your State regulations on this topic. I think Ohio and Michigan are States where the tenant protections are in place with respect to evictions of tenants of foreclosure. (You'll have to check for sure.)

[Ineedhelp2]

Which state, please?

Oregon

[BobMango]

This might be some help in answering the OPs question.


From NOLO

Before May 20, 2009, most renters lost their leases upon foreclosure. The rule in most states was that if the mortgage was recorded before the lease was signed, a foreclosure wiped out the lease (this rule is known as "first in time, first in right"). Because most leases last no longer than a year, it was all too common for the mortgage to predate the lease and destroy it upon foreclosure.

These rules changed dramatically on May 20, 2009, when President Obama signed the "Protecting Tenants at Foreclosure Act of 2009." This legislation provided that leases would survive a foreclosure -- meaning 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 (this notice period is longer than any state's non-foreclosure notice period, a real boon to tenants).

An exception was carved out for the buyer who intends to live on the property -- this 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, too.

[justbroke]

Hey Bob... that actually is great, but sounds like it has Amendment X issues all over it!