Unsure what to do!

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Latest post Mon, Oct 3 2016 1:01 AM by tomstone876. 13 replies.
  • Wed, Sep 28 2016 6:23 PM

    Unsure what to do!

    I am currently renting a house through a real estate company. I received a note on my door this weekend that the homeowner needed to contact the mortgage company as soon as possible. This was Saturday.  Monday morning I took the note up to the real estate company and they said that they would try to contact the landlord and see what exactly is going on. That was Monday morning and as of Wednesday morning  they had not heard back from the homeowners. It's almost like the homeowners were avoiding them they stated.  Finally this afternoon they were able to get a hold of the landlord. She stated that everything had been taken care and admitted that they hadnt been paying the mortgage.  The real estate company said to continue to pay the rent as usual which is due Saturday.  Would i be wrong to ask for proof before i pay my rent?  Also, im not so sure i want to remain in this house that could be foreclosed on at anytime!!  Would i be legally able to break my lease due to what has transpired?  

  • Wed, Sep 28 2016 7:06 PM In reply to

    Re: Unsure what to do!

    RNwants2know:
    Would i be wrong to ask for proof before i pay my rent?

    No and having been down that road when the recession hit I don't blame you.

    RNwants2know:
    Also, im not so sure i want to remain in this house that could be foreclosed on at anytime!!

    Don't be too hasty.  We ended up with five months free rent when the house we leased was foreclosed on.  Worst case scenario is that you end up paying the rent to the bank instead of the homeowner.

    After the recession when many people found themselves in this circumstance a law was passed to protect innocent third party tenants from immediate eviction when the homeowner defaulted and was foreclosed on.  I think the law expired but the banks still go by it because some money (the rent) coming in is better than nothing.

    RNwants2know:
    Would i be legally able to break my lease due to what has transpired?  

    Unfortunately no.  Even if they foreclosed you might not be able to break the lease.  The Bank might choose to honor it in which case you would still be obligated.

    "That's just my opinion, then again I might be wrong."  Dennis Miller

     

  • Thu, Sep 29 2016 6:35 AM In reply to

    • Drew
      Consumer
    • Top 10 Contributor
    • Joined on Thu, Mar 30 2000
    • PA
    • Posts 51,403

    Re: Unsure what to do!

    IN general the lease holds up even as to a next owner , if such is to be......Id maintain compliance with the lease, timely payments  et al.....don't give LL an excuse to mess with lease terms .....sure, keep,solid records of timely payment ....but you have no specific leverage to make sure owner pays his bills ...other than jawbone ...



  • Thu, Sep 29 2016 9:05 AM In reply to

    Re: Unsure what to do!

    RNwants2know:
    Would i be wrong to ask for proof before i pay my rent?

    Whether the owner is paying the mortgage is not your business, and you have no legal right to know.  The good news is that if the home changes ownership, whether due to foreclosure or for any other reason, the new owner is legally required to honor your existing lease.

    RNwants2know:
    Would i be legally able to break my lease due to what has transpired?

    Not unless the lease explicitly says you are (extremely unlikely but you could check).  Just as the new owner has to honor your lease (a contract that pre-dated their acquisition of the home), you also have to honor it unless you and the owner agree to terminate it.

    I do have one piece of free advice:

    Hopefully you either kept a copy of the notice for yourself or wrote down the name and contact information for the mortgage company.  I recommend getting in touch with the mortgage company directly to inform them that you have a valid lease that goes through such-and-such date so they should please leave you alone and not send anyone to take possession of the home.  Make sure to send them a letter by certified mail, return receipt requested.  Optionally include a copy of your lease and/or give them contact information for your rental agent (the real estate company).

  • Thu, Sep 29 2016 9:42 AM In reply to

    Re: Unsure what to do!

    RNwants2know:
    Would i be wrong to ask for proof before i pay my rent?

    Proof of what?  That your landlord paid her mortgage?  I'm not sure what "wrong to ask" means, and you certainly are free to ask anything you like, but whether or not your landlord has paid her mortgage isn't any of your business.

     

    RNwants2know:
    Also, im not so sure i want to remain in this house that could be foreclosed on at anytime!!  Would i be legally able to break my lease due to what has transpired?

    Absolutely not.  For starters, ANY property "could be foreclosed on at anytime" if the owner doesn't pay the mortgage, so there's nothing unique about your situation.  Second, the foreclosure process takes MONTHS (and, in some cases, well over a year), so even if your landlord's mortgage lender had commenced the foreclosure process (which doesn't appear to be the case), you'd have several months' notice AT A MINIMUM.  Third, even if a foreclosure and sale occurred, it wouldn't impact you other than to change the payee for your rent.  If you have a long term lease, the new owner would take the property subject to your lease.  If you're month-to-month, then you can be evicted upon receiving appropriate notice, but that's no different regardless of any foreclosure.

  • Thu, Sep 29 2016 11:40 AM In reply to

    Re: Unsure what to do!

    You do need to be careful. First of all I doubt they paid their mortgage and are caught up. I totally expect this house to eventually go into foreclosure. Google the address and ask a realtor you know to help determine if this house is in pre-forclosure status.

    I would also assume your deposit is probably gone and spent. So if I were you use that to pay last month. Tell the landlord you expect the terms of the lease to be honored. Generally it takes months to get a foreclosure done and the new owners generally honor the lease so I dont blame you for being nervous. Hopefully this house was not in foreclosure danger when you signed the lease, some states have laws preventing LL's from renting a house they know is going to go into foreclosure. When did you move in?

    Good luck.

  • Thu, Sep 29 2016 12:40 PM In reply to

    Re: Unsure what to do!

    I just moved in the house in July!

  • Thu, Sep 29 2016 1:21 PM In reply to

    Re: Unsure what to do!

    OliviasMom:
    I doubt they paid their mortgage and are caught up. I totally expect this house to eventually go into foreclosure.

    All of this being complete speculation with no basis whatsoever in fact.

     

    OliviasMom:
    I would also assume your deposit is probably gone and spent. So if I were you use that to pay last month.

    More baseless speculation and bad advice.

  • Thu, Sep 29 2016 1:27 PM In reply to

    Re: Unsure what to do!

    Yes.  You're living there, and can't live there rent free.  Should the home be foreclosed, you'll just pay the rent to the bank.

  • Thu, Sep 29 2016 2:42 PM In reply to

    Re: Unsure what to do!

    So they rented the house to you knowing they were behind on payments. How nice of them. Your LL's are unethical and I would not believe anything they tell you. Absense a small miracle they got caught up on payments this may house may eventually go into foreclosure. This process takes time though. I am not sure what the laws in your state but you may want to google "foreclosure and tenant rights" for your state and just be prepared.

  • Thu, Sep 29 2016 6:06 PM In reply to

    Re: Unsure what to do!

    OliviasMom:
    I would also assume your deposit is probably gone and spent.

    When we rented out our home using a rental agent, it was the rental agent who kept the tenant's security deposit during the lease term, and returned it to the tenant at the end (after checking with us that we were satisfied with the condition of the house).   So it might be a good idea for OP to ask the real estate company who is holding his/her security deposit.

    OliviasMom:
    So if I were you use that to pay last month.

    Apparently that would be a violation of Indiana landlord-tenant law, unless the landlord has agreed in writing that the tenant can apply the security deposit to the last month's rent.  Mind you, I am not sure what the penalty is for this violation of the law, but it is mentioned in both sections 12 and 13 of the Security Deposits code chapter (IC 32-31-3).

  • Sat, Oct 1 2016 9:03 AM In reply to

    Re: Unsure what to do!

    OliviasMom:
    Your LL's are unethical and I would not believe anything they tell you.

    A much more likely scenario, IMHO, is that this rental house remained vacant after the previous tenant long enough to cause a cashflow problem for the owner, who will hopefully be able to claw her way back to solvency now that the home is generating rental income.  Many Americans live paycheck-to-paycheck, or near enough to it to be easily thrown for a loop financially.  Such people are unwise, not unethical.

  • Sun, Oct 2 2016 6:34 AM In reply to

    • Drew
      Consumer
    • Top 10 Contributor
    • Joined on Thu, Mar 30 2000
    • PA
    • Posts 51,403

    Re: Unsure what to do!

    You are NOT there yet ...there are some state specific quirky issues of who owes you any security back at end of your lease, if the property is sold to new owners ....in the meantime , your LLs personal finances are not your business , butt out. 



  • Mon, Oct 3 2016 1:01 AM In reply to

    Re: Unsure what to do!

    I've found this website http://community.lawyers.com/forums/t/169756.aspx that handles some of this issues. You can their lawyers for some advice.

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