33 answers

Renting a House That Is Being Foreclosed On

My oldest son is renting a house and he received a notice about the house being foreclosed on and put up for auction. The bank told him not to pay rent as the bank now owns the property. His landlord is hounding him for the rent and is threatening him and his roommates. Does anyone know his rights in this instance? If the house sells, how long do they have to find another place? I am grateful for any advice I can pass on to him....

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So What Happened?™

My son has been in negotiations with the bank who now does own the home. He is looking for another place so the situation has improved!
Thanks to everyone who offered advice, now we know our rights and won't be mislead!!
Mamasource clients are awesome!!

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Have him call the rent board or tenant rights board in his town. SF has one and they will explain his rights and tell him exactly what he should do in this situation-- all for free.

When I was a teenager we were renting a house, we were served papers that it was being foreclosed, and we had to move, because the property manager said it was no longer his to rent. I would not give the money to the landlord, as he has not made a payment in over 3 months, or it would not be foreclosed on. Also, I would start right away looking for somewhere else to move to, and contact the bank and see what they can do to stop the landlord as well.
As it sounds like he is no longer the "landlord". I do know that there is a serious problem with the vacant homes being broken into, that might be why the bank told them to stay put.

If the bank has it in writing that he is not to pay rent....
Then do NOT pay rent. If the landlord hassles him, call police with copy of bank letter in hand.

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I work for a state Agency and here's what you should do...
The Deptartment of Consumer Affairs has an entire handbook on line that is called the Tenant/Landlord Handbook and can be found at http://www.dca.ca.gov/publications/landlordbook/index.sht... can also call Acorn Housing (a non-profit housing counseling resource) at ###-###-####.
Good luck and you're a great Mom to be looking out for your son...I'd do the same!!

2 moms found this helpful

go to www.caltenantlaw.com or just Google California Renter's rights - that's how I found it.
If your son meets income requirements he may be eligible to get help from Legal Aid for free as well. It may be worth a consultation fee to talk to a lawyer that specializes in real estate & tenant law in his area. The city of San Francisco has a free service for tenants because the laws there are so complicated - maybe there's something similar where your son is.

1 mom found this helpful

I used to intern at the Human Rights/Fair Housing Commission of the city and county of sacramento. That's an excellent resource for up to date info on situations like this. From my experience as an intern:

He needs to put his rent in something like an escrow account!

He needs to talk to his bank and open up a special separate account showing he was "paying rent" and also, if the landlord hounds him, to send the bank statement with the reference numbers of the rent amount deposits and a copy of the bank letter stating the situation. Every time he gets a notice from the bank or the landlord, he can respond with a show of good faith with the bank account, owed amount clearly delineated with on-time deposits, and the notice of foreclosure information determined by the lender.

If the landlord gets the house out of foreclosure, your son will owe all of that rent to the landlord or possibly to the lender.

Also, while it is not a guarantee, this may protect him from having to pay "late fees" or interest or any penalties outlined in his original lease agreement if this goes to court. No matter what, he needs to "pay his rent" even if he is paying it into a good faith account to show intention.

What he does with the money later after everything is cleared up, and if it is determined he does not need to actually pay it out to anyone, is up to him.

And in California, it's usually 30-60 days notice which the bank would have to give him as well, so he could have ample time to find a new housing option (I'd start looking asap.)

1 mom found this helpful

I would suggest talking to a real estate attorney or to a company that handles rentals. They would both know exactly where he stands on whether he should still be paying his rent or not.

How much time he'll have to move will be entirely dependent upon whether the new owners are buying for personal use or to rent out. If they are buying it as an income property he may not have to move at all. If they want to live in it. Well I'm not exactly sure in this case. I know for regular rentals you have to be given (or give) 30 days minimum to move out. Unless you get evicted, then once the order is signed by the court, it's generally 3-5 DAYS to get out.

I'd suggest looking around and trying to find something else RIGHT AWAY. I know moving stinks (I just did it after I got 30 days notice to move) but having a few weeks to get moved and all is MUCH better than a few days.

Again I'd talk to someone who specializes in real estate issues about all this. They will have more complete answers for you.

1 mom found this helpful

This is a sticky situation. He needs to move out as soon as possible. If the foreclosure is in process then the landlord still owns the house, however if the foreclosure has gone through then the landlord has no legal right to collect rent on the property that doesn't belong to him.
Either way your son needs to move. If the bank is auctioning the house your son needs to be out of there. I would suggest he not pay the rent and use that money toward a new home. Any homeowner will understand why he didn't pay rent and elected to move instead. He shouldn't count on getting any of his deposit back from the current landlord though.

Sounds as if the program is this.
1. Confirm that the house has been foreclosed. Apparently any realator can confirm immediately who is the legal owner of the house.
2. If the bank thing is just some craziness, and the landlord is still the owner, obviously pay him his rent.
3. If the bank owns the house they do not owe the previous owner anything. He probably owes them the deposit they paid, but it is unlikely they will get it. (Since, sleazelike, he has been trying to scam them for illegal payments called rent.)
4. There is NOTHING immoral about them staying in the property. Their leaving does not benefit the previous owner in any manner whatsoever. The current owner, the bank appears to have gien them permission - probably because they want the premises occupied, and so your son is performing a service.
5. They should consult with the bank about a time-frame here, and ask to be kept informed about potential sale. They should also inquire about any services the landlord paid previously.
5. They need to tell the landlord that the jig is up, and contact the police if he persists.
5. Since the owner, the bank, has specifically said not to pay rent, I don't see why they need to pay it into an escroe account. They should, however, get this arrangement on paper.
6. When/if the property sells, they should consult with the new owners about whether they need to move or not. At that point the 30 day information comes into play.

When I was a teenager we were renting a house, we were served papers that it was being foreclosed, and we had to move, because the property manager said it was no longer his to rent. I would not give the money to the landlord, as he has not made a payment in over 3 months, or it would not be foreclosed on. Also, I would start right away looking for somewhere else to move to, and contact the bank and see what they can do to stop the landlord as well.
As it sounds like he is no longer the "landlord". I do know that there is a serious problem with the vacant homes being broken into, that might be why the bank told them to stay put.

If the bank has it in writing that he is not to pay rent....
Then do NOT pay rent. If the landlord hassles him, call police with copy of bank letter in hand.

Since the bank owns the house, your son does not have to pay the landlord.

I have lost a few homes through foreclosure. Since the bank owns the house they can come and lock up the house. One of my properties, the bank came and changed the locks before it went to auction. Of course the property was vacant. Let's say your son is living there while the house goes to auction and they didn't change the locks becuase they are aware someone was living there. The new owner's by LAW has to give him a 60 day notice to move out. A friend of mine had this happen and the new owners offered them $2500 dollars to move out by a specific date in otherwords before the 60 day notice. It was an incentive. So your son may get the same offer.

I would say since the bank owns it now he should listen to them, the landlord is not entitled to rent anymore since he does not own house anymore.....he might want to find his local agency that can advise him of his rental rights! But I wouldn't think the landlord could get rent for a house he no longer owns, he should also probably check with the bank and see is he needs to pay them rent until it is sold. Once it is sold if the new owner wants to rent it out they might let him stay on, if not then he will probably be served with a 30 day notice to vacate. Hope this helps, and good luck for your son!

I would contact the bank and see what the balance on the loan is... and find out if there is any way your son and you or friends can purchase the house for the balance... MAYBE they'd be willing to work with existing tenants... they are not property managers... it might be easier for them...

Good luck!

I think your son bneeds to see more documentation from the bank that they are even holding the loan because my renter received a flyer like that once from a company that wasn't even my mortgage cpompany and I have never even had a late payment. If it is in or close to forclosure the owner can't make the payments iof he is not getting paiod rent. They should pay the rent.

Have him call the rent board or tenant rights board in his town. SF has one and they will explain his rights and tell him exactly what he should do in this situation-- all for free.

Dear Rhonda,
What a pain for your son!
I believe standard notice for asking a tenant to vacate is 30 days, but your son and his room-mates need to be looking now!

I'm not sure about his rights regarding the bank telling your son one thing and the landlord telling him another. But, if the house is being foreclosed on, it is because the payments haven't been getting made. If the landlord is the owner (or previous owner), and he is still wanting rent, it sounds like he is hard up for cash.

I don't know where you are located, but your son needs some legal advice. In my area, we have Redwood Legal Assistance. I'm sure you have the equvelant in your area. They are very knowledgeable about tenant rights and laws and can often answer your questions over the phone without an appointment. They have all the legal forms you might need and, at least here, there is never a charge unless they set you up with an attorney consultation. You can call your local courthouse and they can probably give you the number if you can't find the listing.

Good luck!

I'm no expert here, but if the house has been sold, why would he pay rent to the previous owner? It sounds like the landlord is banking on (no pun intended) that your son doesn't know what happened and is still obligated to pay - which he isn't.

If the landlord isn't threatening eviction that's a sign that they know they have no legal recourse.

I would call a real estate attorney or Fair Employment and Housing.

We just moved about 6 months ago from a home that was being foreclosed on but the bank didn't own it yet. I do know that his rights to the property are until the contract expires, so whoever buys the property will need to work something out with your son. For instance if he still has a 6 month lease, then he owns the rights to the property for that 6 months even if it sells. It might be a good way for him to earn a little bit of money from the buyers. They can work out a deal to pay for his moving costs plus extra. He actually has more rights than he thinks, but I am not sure about what to do with the Landlord. That is a tough situation.

DO NOT pay the rent. The bank is correct your son doesnt need to pay since the foreclosure the bank now owns the deed to the property so even if the former owner took your son to small claims court he would be asking for rent on a house he no longer owns meaning he can't collect. I would have your son get in touch with the bank that owns the property and ask about how long they have. So many foreclosures are on the market right now that the bank may decide to keep the house occupied, especially if it doesn't sale at auction. They may even want to explopre renting the house for cheaper directly from the bank if they can't unload it. The last thing the bank wants is to have another empty house sitting there.

Just some thoughts. It's such a strange time right now in housing that I wouldn't rule anything out when it comes to trying to work with the bank. Again though no matter how much the former owner threatens he no longer has any rights so tell your son to tell him to get lost.

Hope this helps.

I don't have any formal information but why pay the rent the landlord has no control at this time, he didn't pay his house payment and I can bet your son's not getting any deposit back either. As for time to move out well the sheriff will show up and lock them out on the day the back seizes the house. I have heard of this often in the news. Start packing keep your money and don't use this landlord as a reference. What can he threaten him with eviction that is going to happen anyway so save your money for your new place and stay out of houses while this epidemic is going on.
Good Luck

Its a new Obama law that the tennant has 90 days from being notified from the bank that the house is being foreclosed on, to move. And no, you pay 0 to bank.

As far as the landlord, file a restraining order if you have to, and report the stalking to the police. The BANK owns the house now and IFFF the landlord had used the rent your son supplied him, he'd still own the house. What the landlord is doing is completely illegal. Tell your son not to worry, and set aside the rent money for the next 3 months to find his new place and pay for relocation =)

Your son needs to contact the police or sherriffs department, and provide copies of the documents that they were served by the bank in question.This should hopefully slow the harrassment down. Let the authorities handle the landlord that does not pay his payments. I am not sure of the legalities of the move out but a phone call to the bank, and an inquiry into the situation may be helpful. I would talk to the person that wrote the notice, explain the situation and ask for advice. Maybe if they have low enough income legal aide will help them. Good luck to your son, and his friends.

I unfortunately have no advice for him other than to not pay rent as the landlord obviously has no right to be collecting on a home he has lost. I would love to hear any advice you do get. I am in the same situation. I have a lease through October but was told by my landlord that he is losing the house. He was kind enough to refuse my rent. I am now trying to find out what I should do. I would love to be able to buy the home but have fear that I will not qualify. Anyway, please pass on the responses if you don't mind. Good Luck!

The bank is correct. No rent is due. The landlord no longer owns the property. The landlord can do nothing legally as he has already lost the house in foreclosure. Just tell the ex-landlord that the bank has contacted your son and it is now between the bank and your son.
Depending on the location, this process use to take 4 months but the banks are overloaded with foreclosures and can't process them fast enough. Your son may have free rent for 6 plus months. My friends who live in a foreclosed house are going on 7 months no rent and it looks like a few months more before the house gets sold. When the house is in escrow to a new buyer your son will be alerted and will have 30 days to move.
Good Luck,

hi,if he is being threatened, he should callthe police, they may know the laws regarding the forclosure/rental aggreement too-that may happen to more people lately, so i am interested in the answers too. As for a new house, i would be looking now! He should have 30 days escrow to be out tho att least... This is why i hate renting!(not that there is stability in owning now tho either)well, hope it works out for the best and try not to worry!

Have your son stop paying rent and get out of the house ASAP... I went through this myself - the landlord kept all the money and the bank will send the sheriffs to evict your son with only 24 hours notice. The bank will not sell the house until it is empty and they will aim to do that very quickly. Concievable if the notice was just posted that the property will foreclose - have your son check the public auction date - that's really the last date they should plan on being there - they probably wouldn't be evicted immediately but could be and their belongings would be put into storage at a very high expense.

Any money they give the landlord they can kiss good-bye - I lost over $7,000 and was still kicked out with my 2 month old baby.


Depending on where you live I'm not what sure what kind of program is available but when I was having trouble with my landlord I called an organization that handles Fair Housing Laws. It's a non-profit organization called Project Sentinal. They will tell you your rights and usually handle everything for you. Try finding an organization like that. I live in the bay area of California.

First tell your son to confirm that the house is in foreclosure. He can do this by going down to the county recorders office. All he has to do is give them the address and they will give him the APN# or Parcel number and he will be able to pull up the current owners and also see if there is a Notice of Default filed on the property or any other foreclosure documents like a Notice of Sale or a Notice of Deed Transfer. Once the house is auctioned your son will have 30 days to vacate the premises so if there house is in foreclosure and they have set a sale date he can get a clear idea of when he needs to be out of the house.

I would tell him to move out ASAP and find another place to rent. Lots of places to rent right now.


Rhonda, this exact thing happend to us last year. I'm not sure where your son lives but he should contact a local tenants right agency. In oakland there is an organization called Sentinel Fair Housing. The people there were wonderful in walking me through the process. And let me just say that after living in our rental house for two years, having about 6 months of headaches around the whole foreclouse issue...my husband and I were able to buy the house at an auction for way less then the market value!! I don't know if that's something your son is interested in doing but you should know that it may be an option! Also, you should know that Oakland and SF tenant laws are very protective of tenant rights -- just becasue a property is up for sale is not grounds for eviction. I'm not sure what city your son is in but it may be the same where he is. Depending on where your son lives, he and his roommates have rights and likely do not have to move at this point if they don't want to. If the house is purchased and the new owners (or their immediate family members) are going to move in, then they have to give 30 days notice to your son. If they are purchasing the home as investiment property then, unless there are structural issues with the home which would make it unsafe to live in...they can not evict your son -- the previous lease will need to be honored by the new owner. In terms of rent...your son does not need to make payments to the landlord if it is in foreclosure status but to be safe I would suggest that he and his roomates set aside the money each month. What happened for us is that after a month or two the bank decided that they wanted us to sign a lease with them and then they started collecting rent through their relator. Feel free to contact me if you have any other questions...good luck to you and your son.

This is happening to us as well. The bank has to give your son a 60 day notice in writing or offer to pay for the keys if they want the house before the 60 days. Your son does not need to pay the rent because the house is in forclosure. Our landlord's house is in foreclosure and he was great about letting us know what our rights as tenants were. Your son should call the police if the old landlord is harrasing him. Also remind him to get everything in writing from the bank.

The landlord is losing his butt and needs as much liquid assets as he can get (i.e. your son's money). As a realtor, I have seen it and seen renter's get cheated out of their money. If your son was paid a visit by the Bank, he will need to be out of their within 30 days anyways. Banks do not sell occupied homes. Banks will pay the landlord money to get out in time (cash for keys). Trust me. The landlord is in breach of contract and intimidating your son illegally. Speak with an attorney. P.S. do not expect your deposit back !!!

My friend is also in a home (renting) that has recently been foreclosed on and is not paying rent. The previous owners are not the owner's now so they are under no obligation to pay. They are currently looking for a new place to live. I would let the bank know and get the authorities involved if there are threats. A restraining order might be in order also. The other option is to have your son look for a new place. In some respects it is not morally okay to live free off of someone else's bad fortune. That could be the underlying problem as to why they are being threatened. It may be in their best interest to move.

This actually happened to me and my family last year in October. The bank is right, if it is in default and the bank has taken over they DO NOT have to pay rent to the land lord. If it has gone into default the landlord has been taking the money from the boys for a long time and not paid the mortgage. It will probably be impossible to get back any deposit or like in our case the deposit and last months rent. Countrywide had a program called cash for keys and gave us a check if we were out within 30 days. This was terrible I had just given birth and my landlord even knew we were pregnant. This is a slimey situation, tell them not to deal with the land lord anymore. It is no longer his property so they owe him nothing!

where do you live? I have the number for a free legal hotline that we refer people to at my job. I'm in Sacramento so your sons legal rights may change depending on the jurisdiction but here is a toll free number:

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