Came home to a for sale sign posted on the property. Contacted the landlord who says they are attempting to short sale the home. Yesterday, he stated that the bank is no longer willing to work with him and the home is in Foreclosure, but I'm still obligated to pay rent!?!? How is that?
3 Answers from Attorneys
So long as he owns the property you owe him rent. He owns it until it is sold at the trustee sale which could be days or months away depending on what stage the foreclosure process is at.
Furthermore, why would you not owe rent to someone? You still are occupying the premises. You can not pay the bank because they do not own the property, but the landlord still does.
A short sale or a foreclosure is no different than any other sale. The new owner just becomes your landlord, subject to the same terms and conditions as the old landlord. Just as your old landlord could do, once your lease is up or they give you proper notice to end a month-to-month rental, they can end the tenancy, but that is no different than if your current landlord kept the property. In addition, if there is a foreclosure, you get a minimum of 90-days notice to move, and until the end of your lease if it is more than 90-days from ending. Bottom line: as long as you live there you owe rent to whomever owns the property at the time, and you have the same rights to live there as before the sale, no matter how it is sold.
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