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Thanks for the info. It would make sense for a bank to send notices to the actual address being foreclosed on. I hadn't thought of that. We'll see what happens. She would love to stay in the house. I mean who wants to move a year early? But I don't blame her for looking for a new place before a notice comes for her to leave.
I think the thing is not to over-react, as I mentioned before - there are investors out there who would love to buy a foreclosure that already had a paying tenant & if she's at market rate - why evict, fix up & re-rent, when they could just drop off a new payment address & collect the checks? Some banks & investors will also offer cash-for-keys to a tenant to ensure it isn't damaged & avoid the hassle of eviction. You don't know until they make contact with you, but it's unlikely a tenant would have someone on their porch yelling at them to "get out now".
She is definitely planning to get out of the house ( at some point )because she doesn't want to come home one day to a notice on the door that she has 30 days to get out. But what her attorney is finding out is who does she pay rent to? I can tell you straight up my sister in law is not looking for anything for free. She has no problem paying rent. If she has to write a check to a bank or new owner she will do that.
She just does not want to pay this "friend" rent payment BEYOND the friend owning the house. As long as her friend still owns the house my sister in law will pay. She was initially going to skip her August rent payment only to use as moving money to find a new place and because the attorney told her that it appeared the house wasn't in the landlord's name anymore anyway. The house was up for auction. There is nothing I hate more than a freeloader and I'd be the first one to attack someone who just decided not to pay rent. Just like I think this girl who got a mortgage and stopped paying it is a piece of sh*t. This is why our economy is in such shambles. This is why taxpayer money had to bail out banks. People just decide they no longer want to deal with a mortgage.
But anyway....my sister in law is not someone looking for something for nothing. Had this friend honored her lease, she'd have the whole next year to save up for moving. To be told you need to move in a couple of months would throw most people off, would it not?
But then there is the question of the lease. It seems the lease works in favor of the landlord. Her lease ends next August 2017. So she would have to stay until then. But from what her attorney has told her........if the attorney is correct.....is that the house will go up for auction and after a new owner purchases it, she will have 30 days to leave regardless of her lease. So the lease helps the landlord but doesn't help her.
Apparenly there was a Forclosure Act years ago but that expired. It would have required a new owner to let tenants finish their lease. But not anymore. And I can understand that. I mean if I bought a house with the intention of flipping it, I wouldn't want to deal with tenants either.
So now my sister in law doesn't know what to do. Find another place? Stay until there is a notice on the door to leave? She can move in with my inlaws but she's afraid to just move out becuase that's breaking the lease. But if she stays she'll eventually be kicked out. It's just a mess.
Ok, thanks for clearing things up. Note, while the national foreclosure act has expired, many states still have laws that are nearly identical to the national act. From my understanding, though, your sister in law's friend still "owns" the place until the foreclosure sale has concluded, at which point rent is due to the bank/new owner (up until foreclosure sale has concluded, I believe that many states allow the landowner to try to pay the debt/clear up his/her finances). Thus, until this point, she is obligated to continue paying the friend rent, even if it seems like "freeloading."
This is what her attorney told her so far.........
yes after the auction the new owner may say to her, "Sure finish your lease out no problem." The new owner may even prefer it.
yes there are state laws that are similar to the National Foreclosure law that expired. In some states the new owner has to let you finish your lease. Other states require the tenant has 90 days to leave. Apparently in Florida, you have 30 days should the new owner of the house want you out.
So it's kind of a gamble whether she should sit tight and wait for the new owner to see if they will let her stay. She has been making calls trying to find out where in the process of foreclosure that this house is and she's having a hard time. I guess it's in that fuzzy stage right now.
She was told that banks do NOT want to be tenants. So after the bank owns the house, she should NOT send the bank money. The bank wants to unload the house as quickly as possible to a new owner. So sending a bank her rent payment would be a waste.
Now her info could be wrong. But this is what she was told by the attorney. But it's her divorce attorney not a real estate lawyer. The woman was just trying to do a little google work to help my sister in law out.
And she's been sending rent to a P.O. box and doesn't even know how to contact the friend. She's not hopeful of getting her deposits back.
I'm not going to tell her what to do, but I'd opt for an escrow account with the attorney for my rent payments. This way I'm paying rent but not to a crappy, irresponsible friend, especially if that friend doesn't own the house anymore.
What I don't get is why banks don't want rent payments? I know it's more paperwork but to me once your house is going into foreclosure, how can you still be collecting rent? It just seems wrong.
It is wrong, but the house is still "yours" until the bank forecloses& in normal times people never let that happen - in fact, in some states someone who "loses" a house to foreclosure has six months to redeem it. In my old state, the bank could come after any deficiency & they would chase you to the ends of the earth to get paid, so if you really couldn't pay, you pretty much had to file bankruptcy (which forces you to list *all* your assets, under oath to the court). Foreclosure can be a "thermonuclear" option in some states - you walk out of court with at most a couple thousand in total assets & a 450 fico score. In AZ, you can walk away any time you want & tell the bank "tough noogies!".
Be glad that in your state, the tenant has 30 days to vacate. In Idaho, after the PTAFA expired, tenants are treated exactly the same as homeowners, which means that they have 10 days after a foreclosure to vacate. 30 days it at least more reasonable.
10 days? OMG who can find a place to live in 10 days? Around here most apartments have some kind of a wait to get in. Often the ones that are available now are either very expensive or very, very run down. Even 30 days can be very hard to get into a house or apartment.
Well my sister in law is still trying to find out where in the forclosure process the house is. She tried to get in touch with her friend and couldn't. She's paid through July and for now she said she'll send the August rent a couple of days late with a nasty note.
All of this makes me glad I live in an apartment in a rental complex right now. The last thing in the world I'd want to do is have to move in the next month.
Anytime we inquire about a rental of any sort, we ask 'is this property on the market for sale?' and 'is this property near or in foreclosure'. Then we document the question and the answer...just in case.
Koale
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Alrighty then...
