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I got home last night and found a UPS Express Saver envelope from Wells Fargo Mortgage tucked underneath my doormat, addressed to the owner of my rental house. I know that he has previously attempted to modify his loan without success, together with his father-in-law who is also on the note. (I was originally under the mistaken impression that the house wasn't financed.) A little later I found they were behind on their property taxes, but they seem to have gotten up to date since. More recently, his father-in-law let it slip that he had recently had trouble paying his mortgage, but again, had been able to get up to date.
They are upside down by 20% at the minimum, and there are three other properties on the block that have been on the market for a long time. I just need to know if there is any risk to me, if things should turn sour - and it looks like it's just a matter of time, if the loan mod doesn't happen. I am on a month to month lease at a very affordable rate, and would like to stay as long as possible to save money and enjoy the luxury of a detached house with off-street parking.
I just want to make sure I don't wind up getting suddenly evicted, because that is the last thing I would want after paying my rent like clockwork on the 1st every month. Am I taking that risk by staying here?
If the LL goes through foreclosure, and they or the bank decide they want you to move out, they will simply not renew your lease for the following month. That is what the terms of a month-to-month lease allow. It is a risk you take every month with this kind of lease. And non-renewal is not the same as 'eviction'.
Paying your rent on time every month means nothing. It is no guarantee against future non-renewal. And you don't get a refund on your past rent because you have to move out, nor does it buy you more notice of having to move out. I don't know why you thought this detail was relevant.
If the house sells, the person who buys it will have to give you 30 days notice if they want you to move out, since you are on a month to month lease.
If the house sells to an investor, they may prefer you stay, but want a new lease signed, and the rent might change.
If the house goes into foreclosure, you will know about it, as a notice gets posted on the door. It takes at least 4 months before the actual foreclosure goes through (often longer) from that point.
If the house goes back to the bank, the bank has to honor the lease (in your case, 30 days) OR give at least 90 days notice, whichever is LONGER. So if you keep paying your rent, you should have a minimum of 7 months you can still be there, unless the property sells to someone who wants to occupy, then you would get a 30 day notice.
In neither case would you be evicted. Your month to month lease would just not renew for another month. You would have to move, but you would not have an eviction on your record. You can only be evicted for violating your lease in some way, like not paying rent, or doing damage.
*Edit for disclaimer* There are some restrictions on that 90 day thing. Google "Protecting tenants in forclosure act of 2009" I think that is what the bill was called. The rental has to be at a reasonable rate (ie, you can't be renting a 4 bedroom house for $100 a month) and it has to be an arms length rental (ie, you can't be renting from your Aunt Sally), as well as some other things. Look it up.
You are on a month to month lease. You can get "suddenly evicted" at any point.
I mean evicted as in the kind that would appear on the background check when I go to get a new apartment. So the only reason an eviction can happen is if I breach the rental contract or fail to move out when they give notice, right? If they want me out, then I just go, and I'm good?
That is correct. If you pay your rent every month, don't do damage to the unit, and move when you are told you need to move, that is the end of it.
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