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Is it illegal to rent a house that has been foreclosed on
I live in LA County California... Moved into a home on January 1, 2012, our lease was month to month. On February 5, 2012 when the owner came to collect the rent he informed us that he and his wife had split and he needed to ask us to vacate the home so he could move back in but gave us until March 31, 2012 to move out which was 56 days. We have since found out that the house was foreclosed on, on December 19, 2012 and goes up for auction April 10, 2012, ten days from now. Could this be considered fraud and could I take him to court and sue him? Thank you
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No. Why?
When he asked you to move out, he owned it. He still does, until April 10th. As the owner he had every right to ask a month-to-month tenant to move out. You could have insisted on written notice, but assuming you have moved out, I see no grounds for a suit. That he was being foreclosed on is none of your business, frankly. How do you figure you have been damaged? |
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Well there is a caveat here. Under TITLE 6. RENT SKIMMING - Sections 890-894 :: California Civil Code :: 2005 California Code :: California Code :: US Codes and Statutes :: US Law :: Justia the landlord is required to use rental revenue to cover the mortgage. But this only applies to the first year of ownership. So, except for that, the landlord did nothing wrong. There is a difference between starting foreclosure proceedings and completion of foreclosure. It appears that on 12/19 (I assume 2011 not 2012), the lender filed for foreclosure and the auction was scheduled for 4/10. But a lot can happen between filing and auction. Until the auction when ownership changes hands, your landlord owned the property. And could rent it or move back in.
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I moved into this home under the assumption it was going to be a long term living arrangement if the status of the home had been disclosed to me before moving in, I would have had the opportunity to make and informed/intelligent decision. Knowing that there was a possibility (never mind probability) that I would have to uproot my family and move again in 3 months I would at least get to weigh out my options. I feel like the owner was fraudulent.. wouldn't that be correct?
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If you have a lease, then the term of that lease will need to be honored. However, I believe CA law allows an exception where the owner needs to use the property for their own home.
If the house is foreclosed on the new owner will need to honor the lease. Even though the landlord may have been having financial difficulties he may have expected to recover from them and forestall foreclosure. So it would not be considered fraud to have not disclosed this. Divorcing requiring the need to move back in may not have been a foreseen event and therefore not fraud. |
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 Originally Posted by chrisflowers23
"month-to-month lease" is pretty-much an oxymoron. Originally Posted by chrisflowers23
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Contact this CA tenant rights center 'tenantstogether.org'
I thought there was a sticky here with the federal law on foreclosures, that supercedes any state laws? http://www.occ.treas.gov/publication...dbook/ptfa.pdf |
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www.rentalforeclosure.com/foreclosure
(The previous was a bank handbook.) Anyway, your landlord owner had to have known long before he rented to you that he was going to be foreclosed on because it takes at least 90 days for lenders to start the process. |
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Originally Posted by joypulv
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Originally Posted by Fr_Chuck
"In the case of any foreclosure ... on any dwelling or residential real property ... any immediate successor in interest in such property pursuant to the foreclosure shall assume such interest subject to— (1) the provision, by such successor in interest of a notice to vacate to any bona fide tenant at least 90 days before the effective date of such notice; and (2) the rights of any bona fide tenant, ... (B) without a lease or with a lease terminable at will under State law, subject to the receipt by the tenant of the 90 day notice under subsection (1), ..." Whether on not it's a tenancy-at-will, the buyer under a foreclosure has to give OP the 90-day notice. |
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Originally Posted by AK lawyer
The auction is scheduled for April, but the OP was told to vacate by 3/31 |
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You says the house was foreclosed in December. I guess you need to find out when it was 'final.' But with 3 months until auction, it sounds like it's final this month.
My searching finds that you can sue for moving expenses and increased rent elsewhere, and that judges (small claims) evaluate on a sliding scale of how quickly a LL tells you to vacate and how long he knew he was being foreclosed. Some states are enacting laws to require disclosure of foreclosure before renting out. Cities in CA are passing their own moratoriums, so check out Tenants Together. If you refuse to leave I don't know what the law covers. The owner can start eviction but he is no longer the owner a few days later. Then the lender is the owner, and they can't claim they are moving in, so it would be interesting to see how this would play out. CA courts are known for sympathy with tenants. |
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Originally Posted by joypulv
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Originally Posted by chrisflowers23
The problem here is there is no law covering this. He is still the owner until the auction. He can do with the property what he wants. You can try suing him, but I don't think you will get far. |
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Sorry, not very moral, but does not meet fraud requirements, unless you can prove with evidence to the court that he did not plan on trying to save the house.
All he has to do is say he planned on trying but failed. If you find in writing where he said that he was not going to save the house but had planned on renting it and cheating you from your deposit and so on. But doubt that will happen |
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