renter living in a forclosing condo

[thebrain]

What is the name of your state (only U.S. law)? California.

back story: I have been renting a condo for 13 months now, turns out the the bank started forclosure procedings all the way back in march of 2010. For what ever reason it has taken the bank this long to actually forclose on the condo (next week is all but certain). I do have a lease, but unfortunatly it was verbal. The owner is out of the picture, he seems happy to just collect the rent checks and never respond to me.

I found out that after one year, the bank needs to refile all the paper work, including posting a new notice of default on the property and sending a notice in the mail, something they have not done.

I know that new rules state that I should get 3 months to find a new home or be able to stay the duration of my lease. But since it is verbal I am not sure how that would play out.

My questions are: Could the fact that the bank failed to post notice be benifitual to me in postponing the forclosure, or helping me to stay as long as possible after the forclosure?

When the forclosure takes place, should I just wait around for the new owner to make contact? What should I do with the rent payments.

Does the 3 month minimum stay start from the date of the forclosure or from the time I am first contacted by the new owner.

 

[justalayman]

My questions are: Could the fact that the bank failed to post notice be benifitual to me in postponing the forclosure, or helping me to stay as long as possible after the forclosure

if your desire is to stay where you are, ultimately it could help you but since you do not have standing to challenge the action, there is nothing for you to do but watch and wait for the outcome.

When the forclosure takes place, should I just wait around for the new owner to make contact?

I would suppose so unless you plan on diving on your contract.

What should I do with the rent payments.

pay them to the owner of the property. If ownership changes hands and you have not yet been contacted, I would suggest setting them aside until the owner comes to collect and then pay them.

Does the 3 month minimum stay start from the date of the forclosure or from the time I am first contacted by the new owner.

It starts on the day you are given notice of the 90 day period. An owner does not have to evict you. They could simply allow things to continue just as they were. That is something for the new owner to decide.

 

[cosine]

It starts on the day you are given notice of the 90 day period. An owner does not have to evict you. They could simply allow things to continue just as they were. That is something for the new owner to decide.

And it only applies if the new owner intends to use this has his/her primary residence. If they intent to rent it out, the existing lease prevails. But, since it was verbal, you really can't prove you had one, or what the terms were. So the new owner could dictate new rental terms and (start the process to) evict for failure to pay even before the 90 days.

 

[justalayman]

And it only applies if the new owner intends to use this has his/her primary residence. If they intent to rent it out, the existing lease prevails. But, since it was verbal, you really can't prove you had one, or what the terms were. So the new owner could dictate new rental terms and (start the process to) evict for failure to pay even before the 90 days.

I disagree. The law states the lease in effect prior to the foreclosure must remain in force and cannot be terminated with less than a 90 day notice. That would mean that the OP's rent cannot be changed with less than a 90 day notice.

(a) In General- In the case of any foreclosure on a federally-related mortgage loan or on any dwelling or
residential real property after the date of enactment of this title, any immediate successor in interest in such
property pursuant to the foreclosure shall assume such interest subject to-
-
(1) the provision, by such successor in interest of a notice to vacate to any bona fide tenant at least 90
days before the effective date of such notice; and

(2) the rights of any bona fide tenant--

(A) under any bona fide lease entered into before the notice of foreclosure to occupy the premises
until the end of the remaining term of the lease, except that a successor in interest may terminate
a lease effective on the date of sale of the unit to a purchaser who will occupy the unit as a
primary residence, subject to the receipt by the tenant of the 90 day notice under paragraph (1); or

(B) without a lease or with a lease terminable at will under State law, subject to the receipt by the
tenant of the 90 day notice under subsection (1),
except that nothing under this section shall affect the requirements for termination of any Federal- or
State-subsidized tenancy or of any State or local law that provides longer time periods or other additional
protections for tenants.

to me, that says it requires 90 days notice to enact any changes in the current lease.

 

[nextwife]

I've seen a number of lenders agree to Deed in Lieu so that they are not bound by the Tenant Protection act terms, as a DIL is not a foreclosure.

 

[cosine]

I disagree. The law states the lease in effect prior to the foreclosure must remain in force and cannot be terminated with less than a 90 day notice. That would mean that the OP's rent cannot be changed with less than a 90 day notice.



to me, that says it requires 90 days notice to enact any changes in the current lease.

I never said it could be done any sooner than 90 days. What I am saying is that the new law applies only in the case of the new owner using the home (or a unit of a multi-unit building) as his own residence.

The other case is where the new owner intends to lease and not actually live there. In that case, pre-existing law almost everywhere requires the original lease to be honored, in most cases for up to a year. That's longer than 90 days. The new owner cannot evict a tenant on a still-running lease just to get new tenants who pay more. He must let the lease run out under its terms (if reasonable ... a 99 year lease would most likely not be considered reasonable). And even then, what new terms the new owner wants, he usually must offer the existing tenant the option to stay under those terms. Certain areas have other laws limiting the terms (for example rent-control in some areas of some cities).

The new law may appear to apply in these cases, but offers no new protection in most of them since greater protections already existed.

It's only when the new owner wanted to live there that existing law was weak, and the new law provided the 90 day protection. Previous to the past few years, rented homes were only a small fraction of foreclosures, and it wasn't much of an issue. That was the case because the owners had a stream of rental income and were usually not deadbeats. But when the plummet of housing values turned even rental properties upside down, rentals in foreclosure became a larger percentage.

 

[justalayman]

=cosine;2813553]I never said it could be done any sooner than 90 days. What I am saying is that the new law applies only in the case of the new owner using the home (or a unit of a multi-unit building) as his own residence

.You would be incorrect in that statement. The protection plan is in place anytime there is a foreclosure the meets the requirements in the first section. Whether the owner intends on occupying the unit or not does not remove the requirement of the 90 day notice.

The only thing additional due to the buyer intending on using it as a residence is the lease can be terminated in 90 days regardless of how long the term was for.

The other case is where the new owner intends to lease and not actually live there. In that case, pre-existing law almost everywhere requires the original lease to be honored, in most cases for up to a year.

not with a foreclosure. With a foreclosure, most states allow the lessor to be given notice to terminate immediately upon taking title.

That's longer than 90 days.

No, that is less than 90 days.

The new owner cannot evict a tenant on a still-running lease just to get new tenants who pay more.

without this protection law in place, yes they absolutely can. Foreclosures are very different than a typical sale. That is why nextwife said what she did.

He must let the lease run out under its terms (if reasonable ... a 99 year lease would most likely not be considered reasonable).

Nope

And even then, what new terms the new owner wants, he usually must offer the existing tenant the option to stay under those terms.

nope

Certain areas have other laws limiting the terms (for example rent-control in some areas of some cities)

.irrelevant

The new law may appear to apply in these cases, but offers no new protection in most of them since greater protections already existed.

No, existing law offers much less protection in most circumstances.

It's only when the new owner wanted to live there that existing law was weak, and the new law provided the 90 day protection

. Not correct

You need to research what a new owner can due when the house was foreclosed. Everything you have been speaking of applies to a house that was sold outright. There is a difference.

 

[FlyingRon]

I've seen a number of lenders agree to Deed in Lieu so that they are not bound by the Tenant Protection act terms, as a DIL is not a foreclosure.

I agree. But a DIL (or any other non-foreclosure sale) will not invalidate a lease like foreclosures used to.

 

[nextwife]

I agree. But a DIL (or any other non-foreclosure sale) will not invalidate a lease like foreclosures used to.

They won't take a deed unless the tenants are MTM or the owner buys ot te ease an gets it vacated. Many small bank REO depts don't have staff to handle property management on top of the overwhelming volume of foreclosure, second loan foreclosure monitoring, and the Fed Bank reg reporting and revaluation requirements. They are not going to add management staff to take weekend or evening phone calls from the occassional rented foreclosure. In other words, the small REO staff cannot also handle landlord calls - their departments are not set up to be landlords, and the tenants my have limited assistance available.

Additionally, the bank may NOT be required to put utilities in their name until they have physical possession.

 

[cosine]

They won't take a deed unless the tenants are MTM or the owner buys ot te ease an gets it vacated. Many small bank REO depts don't have staff to handle property management on top of the overwhelming volume of foreclosure, second loan foreclosure monitoring, and the Fed Bank reg reporting and revaluation requirements. They are not going to add management staff to take weekend or evening phone calls from the occassional rented foreclosure. In other words, the small REO staff cannot also handle landlord calls - their departments are not set up to be landlords, and the tenants my have limited assistance available.

That's their problem. If they take possession of the property, they have to behave like the owner. Existing leases are still in force unless and until they execute the legal procedures to terminate them. That gets easy if the renter won't pay. Otherwise there are limits in law.

Their excuse for not having the staff is a non-starter. Like quite many "absent landlords" they can simply contract out to a property management company. Many real estate firms, small and larger, already do this. Even some law firms do. I'd bet some are already doing business with the bank in many ways.

Additionally, the bank may NOT be required to put utilities in their name until they have physical possession.

If there is a renter in place under lease, there can be big trouble for utilities being cut off. However, it is common for the renter to be responsible for utilities if it is a single family home, and at least some utilities even in multi-unit buildings.

If the mortgage did have a "no renting" or "owner occupied only" clause, it can get more complicated. But that may not necessarily invalidate a lease, but instead, get the original owner in trouble, depending on area laws.

But in this thread, the renter had only a verbal agreement. What is his answer when the new owner says there was no lease?

 

[justalayman]

But in this thread, the renter had only a verbal agreement. What is his answer when the new owner says there was no lease?

unless he can prove otherwise it is going to be considered a month to month. With that, the new owner can either leaves things as is, evict (with 90 days notice), or impose a new lease (with 90 days notice).

 

[thebrain]

The property reverted back to the benifituary at the trustee sale on 5-11-11. The trustee was/is Bank of America, so I guess they own it now.