Is lease in effect if property changes hands? (Boston: foreclosure, condo)

[chicagoliz]

Originally Posted by thisiswater

No, there is no special language in the lease.

The owners are a young couple who can't afford their current mortgage plus the costs associated with the mortgage and fees, upkeep, taxes, etc., on the condo they are renting to us. When I pointed out that I believed the lease will stay in force even if they sell, one of the owners became very emotional and stated that she could not guarantee that a "buyer would want the property as an investment. They would be more likely to want it as a residence."

I have compassion for their circumstances, but more compassion for ours, which is... we need to stay here for the duration of the lease.

Hopefully, they'll learn from their stupidity. I don't have a lot of compassion for people who lose money on an investment. If you don't know what you're doing, don't make the investment.

It will take a little while before foreclosure proceedings start, most likely. At the end of the foreclosure, the new owner (which could be the bank) will want (and will get) a clear title to the property so they can turn around and sell it. You would be named in a foreclosure suit as a party with an interest in the property, and give you notice that legal proceedings are taking place that will affect you. But, who knows? Maybe the owners will be able to sell it before foreclosure proceedings commence.

It may make sense to be on the lookout for a new property to rent, but for right now, absent a foreclosure action, you have a right to stay on the property for the duration of the lease. Someone might buy it who can get better mortgage terms (or have no mortgage) and would find it acceptable to still buy the property even though it is subject to your lease.

[BostonMike7]

How did you manage to score a 3-year lease when them?


Not very smart of them to lock in a 3 yr lease at a figure they can't increase that doesn't cover their mortgage. Then again, they probably put minimal down and have an excessively high mortgage to begin with. Still...3 yr lease? They basically gave away the right to do a small rent increase each year....




Who knows, they might find a buyer who puts enough down that the rent does cover the remaining expenses. Or they go to foreclosure and the bank may throw cash your way to get you to leave so they can sell the property. I know I tried to purchase a property with a tenant and unit in foreclosure, and it ended up costing me money before I walked away. Never again....

[thisiswater]

BostonMike7: We actually got 6 years with no increases!

Summer 2013, condo was on the sale market and wasn't moving, we signed a 3 year lease. (Almost negotiated an out a year ago when a few work options/changes would have allowed us to move.) Summer 2016, renewed for 3 more years at the same rent! I was surprised but certainly didn't offer to pay more.

They want to put the house on the market this spring. I really think they are assuming we'll move w/out incident. I hope we can get through this civilly.

[MikePRU]

Originally Posted by thisiswater

BostonMike7: We actually got 6 years with no increases!

Summer 2013, condo was on the sale market and wasn't moving, we signed a 3 year lease. (Almost negotiated an out a year ago when a few work options/changes would have allowed us to move.) Summer 2016, renewed for 3 more years at the same rent! I was surprised but certainly didn't offer to pay more.

They want to put the house on the market this spring. I really think they are assuming we'll move w/out incident. I hope we can get through this civilly.

These people sound like the absolute WORST (or best if you're the tenant) landlords ever.

[timberline742]

Originally Posted by MikePRU

These people sound like the absolute WORST (or best if you're the tenant) landlords ever.

Seriously!

[MikePRU]

Originally Posted by timberline742

Seriously!

I really don't understand how at the end of the first 3 year lease they didn't know that this financial model wasn't working for them.

[thisiswater]

Not only that, but the lease states that the rent is due by the 5th of each month and is not considered late until 30 days.

I think they knew what their expenses were, but also that charging that would have taken them out of the running, rental-wise. It's already high for what it is (based on my comps over the years).

[MikePRU]

Originally Posted by thisiswater

Not only that, but the lease states that the rent is due by the 5th of each month and is not considered late until 30 days.

I think they knew what their expenses were, but also that charging that would have taken them out of the running, rental-wise. It's already high for what it is (based on my comps over the years).

The more you tell us about these folks, the more I think they have no business being landlords.

[sawyer2]

Originally Posted by thisiswater

It's already high for what it is (based on my comps over the years).

Does this mean that you are paying more than market rate for comparable apartments where you live?

[thisiswater]

I think we're paying a fair rent. The rental market in town is tight. Here's what happens: Realtors put houses/apartments on the rental market at ridiculously high rents. I follow these on Realtor.com and they sit for month after month. *Finally,* once the rent is lowered, the listing magically disappears. Craig's List is different. Those landlords seems to price at what the market will bear and those listings don't last long.

I think the properties that sit there empty do so because the landlords/agents are pricing them to cover all costs. That's not how one determines worth. It's worth what a tenant will pay for it, no more, no less.