I have been paying rent of $2400 for the last 2 years consecutive. The last 4 months have been month to month due to my lease expiring. Just recently I was given a 30 day notice to vacate which later changed to 60 day notice. I was told the property was up for sale. The property I later found out is a short sale. An all cash buyer has made an offer and is wanting to close in the next 45 days. My question is can the owner still except my rent payment knowing the property is in a short sale situation and is over 3 months behind in their payments? The reason I know this is I was getting mail from Wells Fargo and harassing knocks at the door at all hours of the day and night from a processor trying to get ahold of the owners to serve them court documents. I saw the one document stating they are over 3 months behind with the bank. I confronted my neighbor who reresents the owners as the listing agent and watches the property and takes the check for the sellers. She denied the sellers were behind on their payments until I showed her the documents and mail left behind. Her comment was they probably need the money. Well thats obviuos I said and concerned about my $3,000 depoist due when I move out. I am currently in the process of moving out and not sure about paying the $2400 for my last month of occupancy? The neighbor said I could stay until the close of escrow which is another 2 to 3 weeks from now but have to pay the rent regardless of the sellers not paying the bank.
2 Answers from Attorneys
The neighbor is absolutely right. Your obligation to pay rent to live in the house has absolutely nothing to do with what the landlord does with the money. You do have a right to reasonable assurances that the landlord can refund your deposit, and it might be in both your and the landlord's interests to just agree for you not to pay the last month's rent, so he only has to come up with $600 (or less if he has anything he can deduct for). But in the absence of an agreement like that, you owe rent regardless of whether or not he pays the bank with it. In fact, if the bank has agreed to a short sale, they most likely are not expecting anymore payments anyway. In short, it's none of your business, except you owe the rent you agreed to pay and he can evict you early if you do not pay it.
From a legal perspective, it doesn't matter that the owner is behind in their payments to the bank. If you are occupying the property as a tenant, then you must pay rent. If you wish to discuss the facts of the case further with a tenant-rights attorney, there may be elements of rent-skimming which may provide you with some remedies, however, withholding the payment of rent is absolutely not one of them. I can pretty well guarantee that if you don't pay the last month's rent (or, at least rent through your last day of occupancy), then you will be on the receiving end of a three day notice to pay rent or quit, and then an unlawful detainer. I know it doesn't seem fair that they can collect the rent and not pay the mortgage, but they still own the home, and the payment of rent under your lease was not contingent upon their paying the mortgage.
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