Legal Question in Real Estate Law in California

real estate forclosure

I currently own a rental property that is currently rented out, and am wondering what the legal ramifications would be if I let the property go into forclosure but kept the rent each month until the bank actually takes posession of the property and kicks the tenants out? The property is in Hawaii and I reside in California.


Asked on 12/07/07, 7:25 pm

10 Answers from Attorneys

Allen Farshi Law Offices of Allen Farshi

Re: real estate forclosure

If you file for Bankruptcy it will supersede and divest your lease agreement with the tenant. Otherwise you continue to collect the rent subject to the tenant's lawsuit against you for breach of contract, assuming you have a fixed term lease agreement

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Answered on 12/08/07, 7:44 am
Allen Farshi Law Offices of Allen Farshi

Re: real estate forclosure

If you file for Bankruptcy it will supersede and divest your lease agreement with the tenant. Otherwise you continue to collect the rent subject to the tenant's lawsuit against you for breach of contract, assuming you have a fixed term lease agreement

Read more
Answered on 12/08/07, 7:44 am
Allen Farshi Law Offices of Allen Farshi

Re: real estate forclosure

If you file for Bankruptcy it will supersede and divest your lease agreement with the tenant. Otherwise you continue to collect the rent subject to the tenant's lawsuit against you for breach of contract, assuming you have a fixed term lease agreement

Read more
Answered on 12/08/07, 7:45 am
Allen Farshi Law Offices of Allen Farshi

Re: real estate forclosure

If you file for Bankruptcy it will supersede and divest your lease agreement with the tenant. Otherwise you continue to collect the rent subject to the tenant's lawsuit against you for breach of contract, assuming you have a fixed term lease agreement

Read more
Answered on 12/08/07, 7:45 am
Allen Farshi Law Offices of Allen Farshi

Re: real estate forclosure

If you file for Bankruptcy it will supersede and divest your lease agreement with the tenant. Otherwise you continue to collect the rent subject to the tenant's lawsuit against you for breach of contract, assuming you have a fixed term lease agreement

Read more
Answered on 12/08/07, 7:45 am
Allen Farshi Law Offices of Allen Farshi

Re: real estate forclosure

If you file for Bankruptcy it will supersede and divest your lease agreement with the tenant. Otherwise you continue to collect the rent subject to the tenant's lawsuit against you for breach of contract, assuming you have a fixed term lease agreement

Read more
Answered on 12/08/07, 7:45 am
Allen Farshi Law Offices of Allen Farshi

Re: real estate forclosure

If you file for Bankruptcy it will supersede and divest your lease agreement with the tenant. Otherwise you continue to collect the rent subject to the tenant's lawsuit against you for breach of contract, assuming you have a fixed term lease agreement

Read more
Answered on 12/08/07, 7:45 am
Allen Farshi Law Offices of Allen Farshi

Re: real estate forclosure

If you file for Bankruptcy it will supersede and divest your lease agreement with the tenant. Otherwise you continue to collect the rent subject to the tenant's lawsuit against you for breach of contract, assuming you have a fixed term lease agreement

Read more
Answered on 12/08/07, 7:45 am
Allen Farshi Law Offices of Allen Farshi

Re: real estate forclosure

If you file for Bankruptcy it will supersede and divest your lease agreement with the tenant. Otherwise you continue to collect the rent subject to the tenant's lawsuit against you for breach of contract, assuming you have a fixed term lease agreement

Read more
Answered on 12/08/07, 7:46 am
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: real estate forclosure

Well, unfortunately Hawaii law is probably controlling, and since the question is addressed to LawGuru as one involving California law, the lawyers who can comment most knowledegably won't get the question sent to them.

If this were under California law, I think the answer would be related to the language in most deeds of trust to the effect that they are also an assignment of rents. I think the result would be that the lender would (a) be entitled to all rents due after your default, and (b) sue for the rents as a deficiency on top of whatever they recovered in a foreclosure sale.

Laws on these topics are very state-specific, and what would happen in Hawaii can only be answered by an attorney licenced to practice there.

I suggest you re-ask your question, specifying that Hawaii law will apply.

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Answered on 12/07/07, 11:57 pm


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