I moved into a house last January with two friends. We are renting from an casual friend. After a huge debacle (landlord wasn't moved out when we moved in, place wasn't clean, fireplace didn't work, gates to yard were broken, garage was full of her possessions for two months) we finally got everything working smoothly. We signed a year lease last month (all three of us.) Yesterday I got a phone call from our property manager saying we had to meet up immediately. The landlord has to sell the house. She has a state tax lien and in addition has not been paying on her mortgage. It sounds like she is 90 days behind, and this isn't the first time. She has signed power of attorney to her sister (a Realtor). I have done numerous repair on the house (fixed the garage, rehung doors that won't close) all for free, I only charge her for material.
Anyway now they say that they have to sell the house or it will go into foreclosure. We were offered $300 dollars each to compensate us for the hassle of moving and whatnot from the Realtor. Honestly we are paying $1800 a month, and were planning on living there for the next four years.
Two questions, is $300 a fair amount? That won't even cover a deposit on a new house in portland and they will need to do walk throughs with us living in the house.
If the house forecloses what situation do we have?
I do not want to screw our landlord (a friend), but she has neglected every responsibility as a landlord, and now is trying to keep us in the house (for our rent) and have us put up with agents displaying our home. In all honesty the house will most likely foreclose.
Everybody involved is a "friend." We were offered to rewrite our lease to make it longer, or even move out no questions asked if we wanted to cancel the lease.
What can I do? Seriously, I have moved six times in the last two years and am very tired of the instability of constantly packing and unpacking.
The landlord's family are all realtors or lawyers. Her father is a very prominent trial lawyer and the thought of being taken to court by him is frightening.

Is it possible for you to actually buy the place from them? In today's market it might be a great opportunity to redeem this situation. If your credit is good then you could work with them as far as a "don payment" goes and you buy out ( get a new loan or take over old one ) for a first.

Unfortunately I am going to school full time. Plus the price they are asking for (320k) for what is technically only a one bedroom is pretty steep.

First, A common recompense for breaking a lease is 2 months rent. This is on either side. If the house does get foreclosed on, you will have 90 days to move since you have a valid lease.

And with a lease they can not force you to move, can sell it with you there, but the new owner will have to honor lease.

So of course you can merely tell them no, as Scott said, the min normal would be a sum equal to at least two months rent but I have seen others get more Asking for two months rent and the cost of the move is not unrealistic at all