We have rented this condo for 2 years now and in september of 2009 signed for another 2 years. We received notification 2 weeks ago, that our paroperty is going to auction this wednesday. I am wondering if since he has not been paying his mortgage and had a note of default. Is he leagally able to still collect the rent. OR is that against Ca. Law.
While your landlord is a legal owner of the real property, he or she is entitled to collect rent. The fact that he was not paying mortgage payment to the bank does not affect your obligations under the lease. What you need to do is to make sure that the bank does not violate your rights after the foreclosure. You will have some options regarding your tenancy at this property. Make sure the bank advises you of your rights so you will be able to make a decision in the best interest of yourself and your family.
I hope this helps,
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Real Estate Attorney
The lender or whoever buys the property at auction is required to honor your lease under the law. The Protecting Tenants at Foreclosure Act, Pub. L. No. 111-22, §§ 701-704 (2009), which became law on May 20, 2009, applies to state eviction proceedings.
This act requires that a new owner who took title to residential rental property through foreclosure must honor existing leases until the end of the lease term.
There are three exceptions to this rule: 1) if there is an existing term lease and the new owner wants to occupy the foreclosed property as a personal residence before the end of the lease term, 2) if there is an existing term lease with less than 90 days to the end of the lease term, or 3) if the existing lease on the foreclosed property is a month-to-month tenancy or a tenancy at will. In each of these cases, the owner must provide the tenant at least 90 days notice to terminate the tenancy.
The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The response does not form an attorney-client relationship, nor is it intended to be anything other than the educated opinion of the author. It should not be relied upon as legal advice. The response given is based upon the limited facts provided by the person asking the question. To the extent additional or different facts exist, the response might possibly change.
No, it's not against the law. The property owner remains the property owner and entitled to all the privileges of ownership, including the right to rent the property out, unless and until their loan is foreclosed on. They also had the right to reinstate the loan during their loan's default.
Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.