What Happens When Landlord Stops Paying the Mortgage? (lease, tenants, evict)

[bentlebee]

Section 702 of a federal law that was passed in May, the Protecting Tenants at Foreclosure Act, allows you to stay until the end of your lease, plus an additional 90 days. However, if the new owner plans to occupy the house full-time, he can terminate your lease immediately and give you 90 days to find a new place. Similarly, you'll have 90 days notice if you are on a month-to-month lease. (Unless it is extended, this new law will end on Dec. 31, 2012.)
--------------------

In order for you to enjoy this protection, however, you must be current on your rent. Unfair as it may seem when the landlord isn't paying his bills, he still owns the property until it goes on the auction block. If you don't pay what you owe, he can write to you giving you three business days to pay up or move. If you don't, he can start legal action to evict you. If the court rules in his favor or you don't respond to the lawsuit, you could be evicted within 24 hours.

Florida law specifies that renters must be notified if the homes they're occupying fall into foreclosure. However, sometimes owners don't let the courts know that their homes have tenants. As a precaution you can check your home's address for free on RentalForeclosure.com, which tracks foreclosure notices.

Should you receive such a notice, it's important that you answer it. Send a letter to the judge with your name, address and number of the foreclosure case, which will appear on the notice. (Or you can simply fill out this answer form from the Legal Services of Greater Miami. If you have a lease, attach a copy.)

What Happens When Landlord Stops Paying the Mortgage? - WSJ.com

[Lacerta]

I was just reading up on this today, I was surprised it wasn't a bigger deal when it happened back in May. I just heard about it this week.

Question. I read the bill, but can't tell for sure. Does the lease have to have been in place before the foreclosure happens, or before the foreclosure notice was served, or what?

*Edit* I assume, reading it, that it has to be before the notice of default was served, but I had someone today tell me they know someone who just signed a lease and the bank was due to foreclose like next week, so I'm trying to figure out if they are really covered or not.

[texdav]

That is crazy that they let tentnts stay 90 days beyond the lease.What about the new oweners rights. The landlords will just build in 90 days of rent most likely.There goes more government ignoring contract law.Do harm to a party that was not part of a contract by two parties of a contract. Will be challenge I am sure i court.

[virgode]

The buyer had to be aware of the circumstances, its foreclosure.
When he bought the house, he bought what comes with it and whose
to say they didn't purchase to use as a rental property.

[jdm2008]

Originally Posted by texdav

That is crazy that they let tentnts stay 90 days beyond the lease.What about the new oweners rights. The landlords will just build in 90 days of rent most likely.There goes more government ignoring contract law.Do harm to a party that was not part of a contract by two parties of a contract. Will be challenge I am sure i court.

Not beyond the lease, just 90 days before the lease they signed and bound to is made null and void. If there is a normal sale the new owners have to honor the lease made by previous owners, why not the banks?

[Lacerta]

Yes, as I understand it, it is 90 days OR until the end of the lease, whichever is LONGER. So if you are in a lease, you can stay until it is up. If you aren't in a written lease, or if you are month to month, they still have to give you 90 days.

[francescamarie]

Has anyone had any experience with this yet? On either side (landlord/new owner/tenant)? We're renting a house that is in the foreclosure process and any information would be extremely helpful..