What if a property is bought at auction and there is a tenant with a lease?

3 Replies

Hey everyone,

I have been following a house closely that is scheduled to go to auction in January. Currently the owner is trying to do a lease option. I scheduled a visit at the property. I was upfront with him and told him that I didn't want to necessarily to a lease option, but inquired about doing a sandwich deal.  He clearly wasn't interested and cooled considerably.

Anyway, I like to plan for everything, and if it goes to auction, it would be a good deal of it can be had for the judgement amount, as a flip.  I would do a title search, etc, but I wonder what would happen if he signed a tenant, and still neglected to keep it from the sheriff's sale.  Would the winning bidder be obligated to honor the lease?  Would there be a way to find out if a lease exists prior to the sale?  Thanks in advance!

Jason

@Brian Gibbons  

Thanks for your input!  That's about what I figured.  Also, thanks for the link for the cash for keys!  It is much appreciated.

I'm watching this property so closely more for educational purposes.  It is almost directly behind my place, same developmen, similar size house.  I am curious to see how it turns out, so I have more information going forward in the future.

There was a law passed during the Obama presidency called Protecting Tenants At Foreclosure that covers this; it was amended as well, so you will want to look at the amendments because they clarify some issues. 

Should be some existing BP threads with links to this, so search and you should be able to find. 

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