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ZaxDad · Jan 11, 2007, 02:38 PM

My family and I just moved into a townhome in Virginia in August of 2006. We signed a two year lease. On December 2, our landlord informed us that he was going to sell the home because he could not afford to keep it anymore and that we needed to start looking for an alternate location to live. We have since found out that the house is going into foreclosure. We are scared that we will have to move before our lease is is up. Do we have any rights? The house is going up for auction at the end of this month. How long will we have before we actually have to move? What happens to our security deposit? Who do we pay our rent to? Our landlord has not communicated with us since we told him that we were talking to an attorney and that we thought that he could not do to us what he is doing.

giJ · Jan 11, 2007, 08:47 PM

I live in Northern Virginia, and have bought properties at foreclosure auction.

If he gets a buyer before the auction, the buyer would have to assume your lease.

If the house house is foreclosed and bought by an individual at auction or taken over by the bank (called an REO), your lease is no longer valid, and you can be evicted. HOWEVER, the new owner may be interested in leasing it, though you'll be expected to come up with a new security deposit (since that won't convey) and enter into a new lease.

Fr_Chuck · Jan 11, 2007, 09:01 PM

That fairly well covered it, your lease is valid as long as he owns it, or if he sells it to someone else they have to honor the lease.

If it is actually forclosed that means the bank or the loan company takes it back, If it is foreclosed it voids your lease, at that point the loan company that foreclosed may either give you a new lease, allow you to rent month to month, or they may evict you. It will be their choice, and sorry you don't have any say in it

If the house is going up for auction, then the past owner most likely no longer owns it, and it has already been forclosed on, since the loan company has to have already taken ownership to be able to sell it at auction. So it is very possible that he no longer is your landlord.

If it is now foreclosed, he owes you the deposit, but guess what, I bet he spent it, and does not have it, so you will have to sue him for it, if he don't pay.

I would look at the ad for the sale and see who is the seller and contact them about it.

Once it sells at auction, the new owner can give you a 30 day notice to get out.

May differ from state to state, I am surprised you have not already gotten a notice to move out. I bet the loan company thinks the house is empty

giJ · Jan 11, 2007, 09:56 PM

Originally Posted by Fr_Chuck

If the house is going up for auction, then the past owner most likely no longer owns it, and it has already been forclosed on, since the loan company has to have already taken ownership to be able to sell it at auction. so it is very possible that he no longer is your landlord.

At least in VA, this is not completely true. The "past owner" owns it up until the moment the auction ends. The deed is signed at the end of the auction transferring ownership. It doesn't tend to be filed for up to two weeks (when the full amount of the bid has to be paid).

The bank can have an alternate trustee assigned to auction the property by filing paperwork at the court. Neither the filing nor the appointing of the alternate trustee effects ownership rights.

If there has been no auction yet, the landlord is still the owner.

(Again, this only pertains to VA law, which is where I've gone through the foreclosure process.)