Updated over 15 years ago on . Most recent reply
Need Rent Advice ASAP-Re:Short Sale
I am interested in renting a house which is awaiting short sale approval. There apparently is one contract signed on this property. The realtor says the short sale will take at least 6 months to be approved/rejected. A few questions here. If I sign a 12 month lease contract, if the short sale is approved in 6 months, does the new owner have to honor my 12 month lease? Also, can the current seller continue to show the home for sale before the short sale is approved? Can I get stipulations put in the lease agreement to prevent these things? How can I protect myself as a tenant in this situation? Should I even get involved in this? It is a perfect location and the house is perfect for my family of four. I cannot afford to buy the house at this time. Wife is not working yet, taking care of the kids (2 years and 5 months). Thank you!! Mark
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#3 Real Estate Deal Analysis & Advice Contributor
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- Mercer Island, WA
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#3 Real Estate Deal Analysis & Advice Contributor
- Rental Property Investor
- Mercer Island, WA
I don't think this is going to work out in a way you will like. You're asking for more control of the situation that anyone can promise.
If the house is for sale, there will be showings. Even if there is a contract now, there's a good chance that contract will fall apart and a new one will be needed. That means more potential buyers coming into the place. Most leases allow the owner to have access with proper notice. If the owner is trying to sell, it seems unlikely they would agree to lease it with that clause removed.
If this is in a short sale process, its very likely the foreclosure process has started. That means the lender could refuse the short sale altogether and take the property to foreclosure. There is a fairly new law that gives tenants in foreclosed properties 90 days to move out, but that only applies if the foreclosure filing (different names in different states, lis pendens, notice of default, notice of demand) occurred after the lease was signed. If a lease is signed after the notice is filed, and the property goes to the foreclosure auction, you will have only a few days or maybe a week or two to vacate. There is nothing you can put in the lease to change that because the foreclosure wipes out the lease.
If the place does get sold, the lease survives the sale, and the new owner would be bound by it.