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My husband and I have been renting a house for over six years. Two and a half years ago the owner stopped paying their mortgage

Las Vegas, NV |

I have been renting a house for over six years. Two and a half years ago the owner stopped paying their mortgage and the house has gone into foreclosure (I have continued to pay rent even though mortgage was not being paid). I received word that there is a buy who may purchase the house and that, because I have been the one living in the house, I qualify for money which I really need for moving /other expenses. Our landlord just wrote me and informed me that the owner expects me to split the money with them. I no longer have a security deposit, which they gave back to me over two years ago when this all began. Is that legal even though they are not the ones living in the house? Thank you

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Attorney answers 3


I don't believe the landlord would have a claim to that money. You should contact a local attorney.


I think what may be going on is an offer for a short sale, not a foreclosure. With a foreclosure, the new buyer has to honor your lease, so if you still have a lease, you wouldn't have to move but would simply continue to pay rent to a new landlord. With a short sale, a cash incentive may be paid to the owner to compensate him/her for saving the mortgage company the trouble of foreclosing. The fact that the owner will share this money with you sounds like compensation to you for the landlord avoiding taking steps to evict you. Hope this perspective helps!


This certainly does sound like a short sale scenario rather than a foreclosure. If the property is sold via a short sale, then the property is sold subject to any written lease agreement with an unexpired term. If you have a written term agreement, then you are entitled to continue paying rent to the new owner and remain to the end of the term. If your written agreement expired and your lease is month to month, then the new owner can give you thirty days notice after obtaining title to the property.

With regard to the relocation assistance money, some banks will offer relocation assistance to homeowners who are in default in order to have them leave the property in a good condition. This assistance can also be offered to tenants. In addition, there is a federal program under HAFA that provides $3,000 in relocation monies after the property has closed in a short sale situation. In all likelihood, the landlord is not entitled to these funds because the purpose is for the occupant to leave the premises in good condition and to assist a tenant who is being evicted due to foreclosure or short sale.

This is general information that is not to be construed as creating an attorney-client relationship. Please consult with an attorney to obtain legal advice with regard to your specific situation.