foreclosure, cash for keys, honoring previous lease...

General Landlording & Rental Properties
12yFollow

foreclosure, cash for keys, honoring previous lease...

James Barker
Memphis, TN · Member since 2014 · 10 posts · 0 votes

Hello. I am a tenant in a house that has been foreclosed on while I was paying rent, $1300 / mo, lease isn't up until February but a new owner has the property, and hired a management company. They notified me by letter on the door, to contact them within 7 days, and said my options were 1) show previous lease and sign a new lease with them, or 2) vacate as soon as possible to avoid eviction. I am confused. What are truly the renter's rights in the situation. I've heard 60-90 days rent free is possible, I've heard of cash for keys, how does all this work from the tenant's end. Hoping someone will be generous enough to help me from the tenant side of things, and not just blow me off because I am a tenant (the enemy lol). I have to contact the new management company in 2 more days, and I want to fully understand my rights before they blast me with pressure. Please help. Thank you!

0Reply
39 views

Most Popular Reply

Jon Holdman
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
12y

The old lease is NOT null and void because of the foreclosure. That's explicitly covered by the "Protecting Tenants at Foreclosure Act". Your lease is still valid and still in effect. Here's a summary, with a link to the actual text.

You don't have any free months. If you don't pay your rent the new landlord will evict you.

2Reply
See this reply in the discussion

28 Replies

Jump to latestLatest
  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    12y
    Originally posted by @Jean Bolger:
    I'm not asking you to empathize. (And you're right, I do tend to empathize, not just to fellow landlords. Sometimes it even extends to trying to help someone I'll never meet solve a problem that is distressing them)

    I'm just asking you to realize that you haven't actually been screwed over yet ;)

    I recognize that empathy Jean, as I have it too. The empathy for someone in a tough spot, regardless of the rights or wrongs of a situation. Seeing both sides is both a blessing and a curse sometimes, isn't it?

    You said it best: you paid for housing, you got housing. To that degree the OP's landlord lived up to his end of the bargain. However, if there is a security deposit I suggest the OP make collection attempts from the former landlord and/or file a case in small claims asap. The sooner one makes an attempt to process and serve, the more likely he is find him and to get a judgment. Small claims is cheap to file, and all courts I know of have waivers of fees for low income or people who can't pay.

    I also agree I'd rather be a tenant holding a fair market rent, long-term lease after foreclosure than an investor with a rental property gone bad. But I think that's our age and experience showing. :)

    0Reply
  • Michael J.
    Rental Property Investor · Louisville, KY · Member since 2008 · 342 posts · 123 votes
    12y

    James, for whatever reason the old owner didn't pay the mortgage, they were wrong and will deal with the consequences legally. The mortgage company will most likely go after them for the difference in what the new owner paid.

    Did you have a roof over your head while you paid the rent? You were paying for a service, having a place to live. The old owners problems are not your business and have nothing to do with weather or not you should pay the rent and most definitely have zero bearing on paying the new owner rent. Again, you paid for a service you received.

    Lets say you bought a refrigerator at the local appliance store, were making payments on it and then they went out of business but still sent a invoice for the payment. Does that mean you should stop paying them even if you owe $1,000?

    You deserve for your lease to be honored, assuming you pay the rent, without being forced to change the terms if you still have time on it. So don't agree to sign a new lease, the new owners have a right to a copy of the lease but they can't change it and then make you sign it.

    Free rent is not a right and you are not entitled to it.

    0Reply
  • Curt DavisBusiness Member
    Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
    12y

    @James Barker

    Understand that when someone who is a renter like yourself starts asking about how long can they live for free without paying is the typical renter mentality here in Memphis. If you have been doing what we do as long as we have and seen what we have seen they you would understand why I might come off like I did. If there is a new management company you should start paying them based on your current lease otherwise face eviction which will ruin your credit. If you want to get out of the renter status someday you wont want to ruin it. We have purchased many homes at the courthouse steps like this and the tenants either move out or sign a new lease.

    Curt Davis - KAIZEN Realty538 Reviews
    WebsiteView Page
    1Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free