Hi, I own a rental unit that is in the long process of foreclosure. I don't know when it is supposed to be final-there is no court date as of yet or anything like that but should be within the end of the year. I have tennants occupying the unit and they have no written lease--everything was verbal. They pay me 150 per week that they are there. The money they pay me is not going towards the mortgage payment. Is it illegal for them to be occupying the until and paying me rent that is not going towards the mortgage??

Ok and according to my first response, apparently I need to state that the tennants have been aware of the foreclosure even before they moved in. They know all about it. I was doing them a favor by letting them stay there as long as they needed since they were getting kicked out of their last apartment on a 3 day notice. They were friends with my ex and to return the favor of giving them a place to stay as temporary as it may be, they would pay us rent weekly. This hasn't even worked out since they haven't paid or contacted me in the last 5 weeks and I have tried to get them to leave---so for anyone to reply saying that I am doing the tennants wrong is completely inaccurate!! I have been doing them a favor by helping them in a last minute situation.

Unless you are in California, no its not illegal. But it is unethical. You are providing these people with a place to live and by allowing the property to go to foreclosure, you are pulling the rug out from under them. That is VERY wrong of you.

Since there is no written leases and they pay weekly, as soon as they find out there is a pending foreclosure (and they will), then they can move out on a weeks notice.

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I stand on my answer given the information you posted in the OP (Original Post). If you want to post the additional information in this thread I'll respond to that.

OK, awilliams. Technically, your tenant is bound by whatever verbal agreement you have with them, and by your state's landlord / tenant property code. (See link in the "sticky" at the top of the forum.) You can collect rent and do whatever the heck you want with it, evict them according to the law, etc.

Surely you can see how it seems unethical for you to pocket that money and not attempt to pay the mortgage that was agreed to on the property. Even if the tenants "knew" the situation and knew it would be temporary. I'm guess they're getting notices of some sort and anticipating that they're about to get the boot, so they've decided that they're not going to pay you. Just a guess.

Can I ask why you're not using the money to attempt to save the property from foreclosure? Lenders are making some crazy deals with people right now just to keep from having so many foreclosures on the books.

As noted you can rent to them or anyone unless you live in California, and you can collec rents till the day the gavel falls on that property and the bank owns it. ** which can be months and months.

But as noted if it has a rental value one may be able to work out a deal to try and save the property,