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House in Florida is in Foreclosure and owner listed for Short Sale after Final Judgment - what are our rights?

Ocoee, FL |

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?

Attorney Answers 3

Posted

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.

Good luck!

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Asker

Posted

Lis Pendens from 2009 - actual foreclosure judgment 2 months after signing new lease - lease supercedes short sale?

Carol Lynne Zimmerly

Carol Lynne Zimmerly

Posted

You do not qualify for the protections under the 2009 federal law which makes a new owner after a foreclosure honor the lease, bc the property was already in foreclosure when you signed the lease agreement. However, a Short sale would be different. If the mort. co. approves a short sale, then the new owner would have to honor the written lease agreement unless you and the former owner entered into it for the purpose of committing fraud.

Asker

Posted

Owner is offering reduced rent and allowed us to use our security deposit as May rent when she could not provide documentation that supported her claim of not being in foreclosure. Worded properly as an addendum to our lease, if both parties are in agreement, can this become part of our current lease or does it invalidate the lease we have? No fraud on our part, we planned to be here another few years and she stated she would be retiring with this house and that all the legal notices were only fees being added on to her loan modification/principle reduction.

Carol Lynne Zimmerly

Carol Lynne Zimmerly

Posted

Your LL can forgo rent in May and then use the deposit to cover that charge once the propety is no longer hers. Neither the LL nor the Tenant can use or agree to use the deposit during the tenancy. If you are agreeable, then the LL can carry a balance on the Tenant Ledger Card and then after the tenancy, use the deposit to credit the Card so the balance is reduced by that amount. I wouldn't put it in writing, as it would be void due to being against the Florida Statutes. You can put in writing that the LL will carry the balance and not charge a late fee or deliver a Pay or Quit notice.

Posted

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.

This response does not create an attorney-client relationship. Unless you are already a client of the Law Office of Preston H. Oughton, pursuant to an executed fee agreement, you should not use, interpret, or rely on this response as legal advice or opinion. Do not act on any information in this response without seeking legal advice. Preston H. Oughton poughton@oughtonlaw.com (904) 854-6336.

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Posted

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.

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1 comment

Asker

Posted

Lis Pendens back in 2009 - being told that invalidates ability to stay til end of our newest lease. Foreclosure sale date has been postponed until 8/20 in order for her to sell the house. Not sure if we should be looking to move urgently or if lease really does hold up as we just signed a new one 2/1/12. Thank you - we obviously need the help.

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