Protecting Tenants at Foreclosure Act
Hi Guys,
I am looking at a property that I hope to be able to house hack and live in for a couple of years. The owner wants me to spend a few thousand dollars to pay her attorney to negotiate a short sale with the bank that may or may not work out. The home has been vacant for about 5 years and the bank has still not foreclosed on the owner. I am considering signing a 5 year long term lease with her to rent the property for about $1,000/month which is less than comps, but the house is in dire disrepair. Presumably when the company currently securing the property sees someone living in it, they will inform the bank who will hopefully then foreclose on her (which she is 100% okay with and would like to happen so she can get the home off her books). Based on the Protecting Tenants at Foreclosure Act of 2009 which as I understand it is now permanent law (Congress - Protecting Tenants at Foreclosure Act), the bank would have to honor my long term 5 year lease. Essentially it allows me to have a leveraged position with the bank to either (a) purchase the property, or (b) get cash for keys. My question is simply whether or not anybody has any experience doing something like this? As far as I know, it's legal, but is it ethical to try and strong arm the bank like this? Any thoughts are appreciated.
Thanks,
KC