Just signed a 2nd lease 2/1/12 for 1 year. Owner has continued to deny foreclosure was in process. Sale date was set for 5/25/12 - appears to have been postponed. Just listed for short sale on 5/18. Owner is offering us reduced rent, but what happens to our lease if it sells via short sale or if it goes to auction?
Landlord / Tenant Lawyer
You can continue to rent as a month-to-month tenant if you signed the lease agreement after the foreclosure case was filed.
The new owner who purchases at foreclosure would have to give you 90 days notice that he is terminating your lease.
The new owner who purchases at short sale would have to honor the written lease agreement.
You will continue to pay rent to the current owner through the date of the sale. About ten days after the sale, the clerk will issue the certificate of title and the high bidder will become the new owner. At that point, you will pay rent to the new owner. The current owner will owe you the security deposit back after he is no longer the owner.
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3 lawyers agree
I agree with Ms. Graham. A Lease governs the relationship between the Landlord and Tenant. The existing Lease will show the term and any subsequent owner of the property can honor that lease agreement.
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Lease is still in effect, the foreclosure process and short sale process does not affect your warranty of habitability. After the foreclosure sale, you will have 90 days more under Florida law to vacate. Now you may have a claim against the homeowner who is in foreclosure if your lease is cut short, however, that cause of action is not ripe at this time because this short sale process may delay the foreclosure sale until the end of your lease term.