Colorado Law. What are the tenants rights when a property is in foreclosure? Are we obligated to pay a break lease fee?

The property that we are renting is in forelosure. The management that handles that property keep telling us that is not in foreclosure. We got a notice from the bank and a letter from the public trustees office that the house is in forclosure and it already has a sale date. But the management doesn't want to acknowledge this. We called the owner and he did say that he was behind on his payment. We asked for the owner if we could break our lease due to the fact that we have no peace of mind living in that house and can't get any straight answer from the managment and owner. The owner agreed to terminate our lease and we already paid our rent for next month. But the management said that we are still obligated to pay a break lease fee even though the owner and I had an agreement.

Colorado Springs, CO -

Attorney Answers (1)

Ralph Oliver Thompson

Ralph Oliver Thompson

Tax Lawyer - Salinas, CA
Answered

Typically, the lease is between the property management company and the lessee. Look at your lease and see if that is the case. In that situation, you need to continue pay rent to the property management company or pay them a termination fee. A lot depends on the language of the lease. Also keep in mind that if you have a lease, you will have at least 90 days after the foreclosure auction before you are evicted. If the house is not going to occupied by the purchaser in foreclosure, the purchase must honor the terms of the lease and you can stay in the house as if it were not foreclosed on. This is based on federal law, S. 896, P.L. 111-22 that was effective May 20, 2009.

Mr. Thompson is licensed to practice law in California and is located in Salinas, His response here does not constitute legal advice and does not create an attorney/client relationship. The response is in the form of legal education and is intended to provide general information about the matter in question. Many times the questioner may leave out details which would make the reply unsuitable. Mr. Thompson always strongly advises the questioner to cofer with an attorney in their own state to acquire more information about the specifics of their case.

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