What To Do When Rental Gets Foreclosed?

My wife and I currently life in Orlando, FL and we are renting a condo conversion. We have been renting the place since Aug 06, with a lease set up between us and the private owner. We recently signed a new lease (as our old one expired) in August. Things seemed to be going ok.

2 weeks ago both my wife and I got a summons, that let us know that our landlord was being sued by the bank he financed the house through, for not paying his mortgage since July of this year…

Now I’m a younger guy and haven’t had much experience with matters such as this, I didn’t know what to do, not to mention well stressed over the matter.

I was frantically asking advice from anyone and everyone I knew. Some said keep paying your rent and just make sure there is a paper trail, others stated don’t pay it and save the rent money for the eventual move(if the house gets foreclosed they usually kick you out, or so I’m told, and its usually really really short notice, 24hours).

Eventually I spoke to a lawyer, mind you his specialty wasn’t in this area of law, but his suggestion was not to pay the rent and save it for the move.

So we didn’t pay rent and so far the landlord has not contacted us. My question is was this the right move to make and what are my obligations/risks in a situation such as this (specifically being a renter who’s home is potentially getting foreclosed)?

-Eric

After the foreclosure happens, then in most states the lease is broken, meaning you have no obligation to keep paying rent and the landlord, now the bank, has no obligation to let you stay there

If you paid a security deposit, you’re still entitled to get that back from the landlord.

Keep saving for the move, which will probably take first and last month’s rent and a security deposit. Consider pre-packing up your non-essential items. Assuming your landlord doesn’t discover a secret box full of gold coins and pays off his mortgage, you’re going to have 24-72 hours from the inevitable eviction notice to get out of Dodge.

You really need to get familiar with Florida state laws for this, though. Consider contacting your local bar association and asking for a referral to a lawyer specializing in tenant rights.

RELATED: href=”http://www.bankrate.com/brm/news/real-estate/20071109_foreclosure_eviction_renters_a1.asp#one”>Foreclosure can leave renters homeless [Bankrate]
As Owners Feel Mortgage Pain, So Do Renters [NYT]

Comments

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  1. Project Thanatos says:

    “Eventually I spoke to a lawyer, mind you his specialty wasn’t in this area of law, but his suggestion was not to pay the rent and save it for the move.”

    Anyone else find that the lawyer’s specialty wasn’t law as humorous as I?

  2. banks says:

    Don’t count on ever seeing your security deposit back. If your landlord is broke enough that he can’t make mortgage payments, he probably spent through the deposit money already.

  3. Buran says:

    How is he entitled to get back a security deposit from the landlord, when the landlord isn’t the one he signed the contract with and so doesn’t have his money?

    I think this person needs to file a lawsuit for breach of contract and ask for the return of deposit money and punitive damages — I’d say covering the cost of moving him somewhere else when the guy he DID sign a contract with failed to be able to keep him there for a year when that is the deal he signed would be fair.

  4. Imaginary_Friend says:

    Ouch! That is a messed up situation. My sympathies…

    How will not paying his rent affect his credit though?

  5. JustAGuy2 says:

    @Project Thanatos:

    No, because we read the sentence, which reads “wasn’t in THIS AREA of law,” not “wasn’t in LAW.”

    Lawyers specialize – getting advice from a tax attorney on real estate matters is better than nothing, but not nearly as useful as a real estate lawyer’s advice would be.

  6. Buran says:

    @banks: This is when you do things like get a court order to garnish wages or seize tax checks. If you win a lawsuit and are awarded money, the court can and will use its power to seize that money, and court judgments aren’t dischargeable in bankruptcy as far as I know. You do have to file some paperwork but you can get it done.

    Courts can also seize property and sell it at auction to get the judgment paid.

    In other words, the guy may not have the money now, but if he ever does get the money, it can be seized from him by force.

  7. qitaana says:

    @Project Thanatos: His specialty wasn’t this _area_ of law. I’d imagine if you phone a criminal defense attorney, or one who usually handles family law, or whatnot, they might not know much about foreclosure as it applies to renters of the foreclosed property.

  8. JustAGuy2 says:

    @Buran:

    In general, the owner of a rental property is responsible for security deposits – if you buy the property, or take it back from a mortgagee, it comes with the liabilities, including security deposits. The bank could go after the defaulted owner for the security deposit, but if the bank forecloses, the bank inherits the obligations along with the property.

  9. hellinmyeyes says:

    I wonder since the bank has already included him as part of the summons whether he will get the opportunity to gain the foreclosure from the bank if the bank completes the proceedings.

  10. prizgrizbiz says:

    I’m surprised the lender didn’t specify what the renter’s position was with regard to the property. Just save the notices and put the rent payments in A SEPARATE BANK ACCOUNT opened for that purpose. If one of the parties takes the renter to court, they can explain what transpired and the money will be there, if not you have the money and nothing is lost.

  11. Tux the Penguin says:

    I would just like to mention that in some cases the bank or whomever is foreclosing on the property might be willing to work out an arrangement to allow you to live there until they are able to do something with the property. As I advised a friend of mine, simply go to the bank and say “Look, if you allow me to stay until you sell it, I’ll continue paying the rent as per the original lease. At least then you have some income. Otherwise, it sits empty, earning you nothing, until you unload it.”

    The bank in question accepted the offer and he’s been living there for six months now. I doubt the bank will be able to unload it, given the area its in. Now I’m just trying to convince my friend to offer to buy the property (he really likes it) and ask the bank to credit him some of his previous rental payments as mortgage payments.

  12. samurailynn says:

    @Buran: It sounds like the problem is that he hasn’t been evicted and doesn’t know if he will be. That means the lease has not yet been broken – he’s just trying to plan for when/if it is.

    If he doesn’t get his deposit back (from the landlord or the forecloser) if he does get an eviction notice, that would be the time to file a lawsuit.

    If a rental property is foreclosed on, do banks always evict the tennants? It seems that in the current market, it might be better to start them on a month to month lease. At least some income on the property is better than none, especially if the rental property may not get sold at auction.

  13. Pylon83 says:

    @JustAGuy2: @Buran:
    WIth regard to the security deposit, it depends on the indiviual state law. Some states presume that it transfer’s along with the lease (which the new owner assumes), some states it has to be specifically transfered to the new owner.

    That being said, the advice offered by the Editors and by the commenters is all TERRIBLE. The ONLY thing this guy should be doing is talking to a REAL ESTATE or LANDLORD/TENANT attorney. Not paying rent is a good way to not only get evicted, but to get sued for the back rent, which regardless of the circumstances the OP is liable for. This is dangerous ground to be treading upon, not only for the OP, but for the Consumerist in offering what is basically legal advice (Practicing law without a license). Not paying rent is NEVER a good idea and will lead to nothing but more problems.

  14. kiloman says:

    @Pylon83: Agreed. There was an article at CNN Money on this very topic last week. They strongly recommend continuing to pay your rent on time: [money.cnn.com]

  15. Boogaloo2 says:

    It seems like your landlord had you sign a new lease under false pretenses (the fact that he knew he wasn’t paying his mortgage & was likely to get foreclosed upon). Therefore, doesn’t it seem like the lease would be very easy to get out of? Leases are supposed to be upheld by BOTH parties and clearly he is not upholding his end. Seems like a breach of contract situation.

  16. Boogaloo2 says:

    I still think an appropriate lawyer should be secured, though. They could definitely tell you for sure.

  17. loganmo says:

    I agreee wiuth JustaGuy. It is impossible to give advise here without seeing the lease. Under many residential leases, if the title of the property changes hands, the lease is assigned to the new owner, who is legally obligated to fulfil it. If such a clause existed in the subject lease, the bank would, in effect, become the landlord. This really should be no different than if the landlord simply sold the property in the middle of the lease. In that case, the new owner would, likewise, be legally obligated to continue performance of the lease contract until it is completed. The landlord, if he does things properly, should assign the security deposit to the new property owner-the bank. My guess is the bank does not want to deal with this situation, so you should be able to negotiate your way out of the lease if you wanted to. But you def. need to consult a landlord/tenant attorney. If you cannot afford one, and you live in an area with a law school, many law schools offer free landlord/tenant clincs where you can get help-your city gov’t may also free advice.

  18. loganmo says:

    a

  19. hollerhither says:

    I rented a condo, and the owner declared bankruptcy. Not only did I have to move unexpectedly, he listed my security deposit and last month’s rent (over $1400!) among his “creditors.” Which was inappropriate, should have been held in escrow. A bankruptcy attorney told me it “wasn’t worth it” to him to work on this case, and the state was of no help whatsoever, nor was the person overseeing his bankruptcy. Apparently I was in a no-man’s land between bankruptcy and real estate law. As a (not) “creditor” I was even forbidden from contacting the landlord directly or filing a small claims suit against him. So the scum got away with it.

    Anyway, I guess what I’m saying is, be careful, but don’t be surprised if you get screwed over even if you think you are doing the right thing. If I had stopped paying rent that last month, I would have at least retained $900 or so. NOT that I am necessarily recommending this to others, but it’s what I would have done differently in that situation, knowing what I know now.

  20. olderbudwizer says:

    The speed of foreclosure and the timing of evictions vary greatly by state – so OP should become familiar with his state’s laws in this area – easy enough to Google or find on the state/county website. They could have anywhere from a couple of months to almost a year before this get’s down to eviction. Also, anyone interested in learning more can find lots of documented procedure and personal experiences on bankruptcyforum.com.

  21. quail says:

    My parents went through the same thing when they lived in a condo while their house was being rebuilt. The insurance company paid the rent, but the condo owner never paid her mortgage. The bank foreclosed, but my folks went directly to the bank and spoke to someone about having them take up rent for the next 5 months until they would move out. The bank thought it a wonderful deal, since it was basically free money for them. With the state of the current housing market I suspect that the entity taking over the condo might make a similar deal with you. As long as your rent is inline with what’s suitable for the area. Heck, they might even be willing to have you take a two year lease while they wait for the housing slump to subside.

    In addition if you find a tenant’s rights organization in your area then Make an appointment and for free they can give you advice that pertains to your state, county, and city.

    In the meantime do continue to pay rent to whomever owns the condo now.

  22. Pylon83 says:

    @loganmo:
    Typically foreclosure supersedes any lease between the owner and a renter. It’s wholly different from the property being “sold” to a new owner, which is subject to any lease. Foreclosure does typically “Break” the lease, but the new owner still has to file a forcible entry and detainer action to get possession. A good lawyer can drag that out for at least a month or two in order to allow you to secure housing. When they serve the notice, if you don’t move out, they cannot just change the locks or move your stuff out. They have to go to court, win, then get the sherrif to actually do the evicting. Again, this process can be lengthened with the assistance of a competent landlord-tenant attorney.

  23. quail says:

    Side note: someone mentioned the hassle of taking a landlord to court who’s going through bankruptcy and doesn’t have your security deposit sitting in escrow. (I’ll vouch for it being a big hassle to deal with such cases. Even if you got a judgment in civil court who’s to say he’d ever pay?)

    Some states make it a law that landlord’s must put security deposits into an escrow account. If yours is such a state then you could at least file a police report about it and let it become a criminal matter. At least there would be some justice in that.

  24. dicus says:

    @Buran:

    Punitive damages aren’t generally available in breach of contracts cases unless there is an allegation of fraud or something. Damages available under the breach claim would likely be cost of moving, and any other expenses incurred for having to get out of the place.

  25. savvy999 says:

    Personally I would hold back my rent until you send (and receive back) a registered letter to the original LL asking for a clear explanation of how to proceed, where your security deposit is, etc.

    You can always (and should) pay the landlord later for back rent if he asks for it, before it gets into you’re-being-sued territory.

    Similarly, what is the situation if something in your condo broke– does the LL have the means to fix it in a timely manner? I would ask this too in writing. If he cannot, then you must ask for and receive an amended/early termination of your lease.

  26. North of 49 says:

    Talk to the local tenancy group immediately (Rental Tenancy board, whatever) and find out what they say you should do: withold rent or not.

    Talk to the bank and find out if they are agreeable to letting you stay until the ownership is settled. easy money for them if you are paying them rent.

  27. Twitch says:

    If he signed a lease to you in August,and hasn’t payed his mortgage since June or July, that’s called fraud.

  28. Pylon83 says:

    @North of 49:
    The bank has no rights until they have title to the property. Further, there are no grounds upon which to whithold rent at this point. Only matters between the LL and the bank that do not directly concern the tenant. The bank has no obligation to discuss the matters with the tenant until they take possession of the property.

  29. Pylon83 says:

    @Twitch:
    That might be a bit of a stretch. What if the LL claimed that he was behind 2 months, but he had every intention to get caught up on the payments? For it to be fraud, it would seem that the OP would have to prove that he not only was behind on the mortgage, but that he had no intent to get caught up and intended to let it fall into foreclosure.

  30. pinkbunnyslippers says:

    Oh you better start packing up your stuff – the bank is going to evict you as soon as they officially own it. Banks aren’t in the business of being landlords, so if you’re hoping for them to work something out with you to let you stay there a little longer until they “do something” with the house, it’s not going to happen.

    Contact a Real Estate Attorney, get your sh*t packed, secure a new place, and get the heck out of there ASAP.

  31. beavis88 says:

    Find a lawyer who knows real estate/tenancy laws. NOW.

  32. morganlh85 says:

    I just saw an article about this in the Detroit Free Press. Apparently there is a law in the works that would require that new owners of foreclosed properties, usually the bank, allow renters with a lease to remain on the property for up to 6 months, and 90 days for those without a lease.

  33. bearymore says:

    There was a good article on this subject in yesterday’s NY Times. Here’s the URL:

    [www.nytimes.com]

  34. trollkiller says:

    Open an account and deposit the rent money in there. This will show good faith on your part as you did not know who was legally entitled to the rent money in case your landlord files eviction for non payment of rent.

    Below are a few links that may help, but you need to contact a lawyer that handles rental disputes.

    Good luck.

    [www.floridalawhelp.org]
    [www.flsenate.gov]
    [www.floridapirg.org]

  35. realwx says:

    Ouch. The previous place I lived had a horrible company (Signature Management in Baltimore, MD) as a landlord and the original owner I was paying rent to apparently didn’t pay his mortgage for 6 months and the house foreclosed & we were evicted.

  36. North Antara says:

    Talk to the bank. Ask them about trying to buy the house, if it makes sense. They will do pretty much anything to try to recoup loses. The last thing they want is to have to sit on a house for a few months.

  37. North Antara says:

    losses*

  38. Pylon83 says:

    @trollkiller:
    There is no question that the landlord is entitled to the money so long as he holds title to the house. Regardless of whether he is paying the mortgage, his name is on the deed, he gets the rent.

  39. hollerhither says:

    @quail:
    Wow, that is an interesting idea, thanks. Too bad I didn’t have Consumerist 6 years ago. :(

  40. SouthJerz says:

    Keep paying your rent. Just because the property is being foreclosed does not void your current lease. This can come back and bite you if the landlord decides to sue you. He’ll win. Upon eviction, VIDEO TAPE IT. Make sure to capture the condition of the house and the officers executing the eviction. If you need to go to court to obtain your deposit, you have proof that you left the house in good order. You’ll also have witnesses on the tape that can testify about the home’s condition.

  41. trollkiller says:

    @Pylon83:
    As I read it, our poor friend in Orl. has been paying his rent up to the time he received the summons. As I see it (I am not a lawyer) the ownership of the property is now in dispute, that places the lease in dispute. If you add in the question about bad faith from the landlord and the lease is definitely in dispute.

    If he places his rent in a separate account and leaves it alone, he can rightfully claim ignorance as to whom he needs to pay. It also shows he is not attempting to enrich himself unjustly by living rent free.

    Once the judge decides who owns the property and who if anyone is rightfully due the money, the OP has the money on hand to satisfy the judgment.

    The fact that the landlord has not demanded rent yet tells me that the landlord does not feel he is owed that rent. For all we know the landlord may have already turned the property back to the bank voluntarily.

    So I stand by my advice not to pay the rent to the person that wrote the lease but place it in a separate account. Also contact a lawyer.

  42. Flibbetigibbet says:

    Do what Clark Howard did in this situation many years ago: call the bank and see if they’ll sell you the condo at a discount after they foreclose. Seriously. The bank doesn’t want to own it, and they’d save money and hassle by immediately getting it in the hands of a new owner (you). You might just wind up paying less than you are now and owning the place.

  43. mzs says:

    In 1990 or 1991 my parents almost bought a foreclosed house. The house had renters. They claimed that they would not need to move. After talking to a lawyer it basically seemed that in Illinois when this house was foreclosed the the bank became the land lords and needed to honor their end of the lease. This probably does depend a whole lot on what the lease actually says though.

    The bank was even offering to to give the renters their security deposit back plus extra money even thought the place was in bad shape just to get rid of them so they could sell it to my parents, but the renters would have none of that.

    I think the person with the question should 1) talk to a lawyer and 2) keep paying rent because the lawyer will tell him that he will be able to stay in the place after the foreclosure and even if that is not the case, the bank will end-up giving him a check for the money he is owed. He probably jeopardizes that by not paying rent.

  44. pegr says:

    Keep as much money as you can. Prepare to move out. After all your stuff is gone, leave it unlocked. Come back 2 to 10 days later and burn the place down. With any luck, the owner hasn’t paid his insurance lately either. (f’em both, bank and landlord…)

  45. MameDennis says:

    First of all, I agree with above posters that you need to talk to a lawyer.

    Could you pay the rent into an escrow account, as is the practice when the landlord is behind in repairs? That way, you’re paid up, you have a paper trail, but Landlord McFraud doesn’t run off with your cash.

    I would also scope out moving options–you could get booted out with very little notice. You need to be prepared to get your stuff out of the building FAST.

  46. Pylon83 says:

    @trollkiller:
    The ownership of the property is not in dispute. The landlord owns the property until the foreclosure action is complete. The Bank does not “think” they own the property. They know they do not, but when the foreclosure is complete, they will. Since there is no dispute about ownership, there is no dispute about who to pay rent to. Your suggestion is likely get the OP evicted and sued for back rent. The court does not care if it is paid into some other “Account”. If it does not go to the rightful landlord, it is not “paid”, making it late and subject to any late fees and legal action.

  47. Pylon83 says:

    @MameDennis:
    The eviciton won’t happen overnight. The new owner can’t come out and “kick you out”. They can serve a notice to vacate. If/when you don’t, their only action is to take you to court. That is a process, it’s not 24 or 48hrs. It’s a week or 4. There appear to be a lot of alarmists on here who think the locks will be changed and your stuff on the street 24hrs after the foreclosure is complete. Banks are subject to forcible entry and detainer statutes just like a regular landlord is. Relax, keep paying rent, and call a lawyer.

  48. RandomHookup says:

    The advice I got from my attorney when my landlady died (I know different situation, but maybe something to learn here) was to stop paying rent until someone comes to tell you what’s up. I was lucky the kids didn’t start fighting over the money because cases like that can get messy…they even got mad when I made out the checks to “the estate of…”

  49. dualityshift says:

    @dicus:
    The fraud happened when the landlord, (owner of the property) signed the lease, and started cashing those rent cheques. There is an obligation by the landlord to provide a rental property without the tenants fearing eviction for events beyond their control. The landlord was obligated to pay his mortgage on the property and didn’t. That’s the fraud.

  50. Pylon83 says:

    @dualityshift:
    Fraud would be very difficult to prove. You would have to show that the LL had no intention of ever paying the mortgage again after the lease was renewed. The simple fact he defaulted on the mortgage does not make it fraud.

  51. thebaconissleeping says:

    So this happened to my family and me just this year.
    Signed a lease and the owner of the condo foreclosed on the property. The property management company, who was the middleman as we have never met the owner, gave us our full security deposit back and we have not had to pay rent for the past three months. We bought a house and the payments on it are less than what we paid in rent.

  52. noorct says:

    Depends entirely on the state. Generally, the rule is a foreclosure cannot terminate the rights of the tenant or modify the lease. A foreclosure transfers the title back to the bank, in most cases it cannot change the lease itself i.e. the bank is now considered the landlord. Therefore, unless the original landlord could have broken the lease, generally the bank cannot either and are required to give the same notice etc… as the original lease called for.

    I practice law in Georgia, and am not entirely sure this holds true for Florida. My advice is to place the back rent and current rent into an ESCROW account monthly to indicate ability and willingness to pay and good faith. Then contact a competent real estate attorney to research the situation and work out a deal with the bank. Remember, though, that as long as you keep “paying” rent (generally setting it aside in escrow is enough when the person to be paid is indeterminate), the new owner cannot generally terminate the lease except for cause or with appropriate notice. So if you like the place, get on it, otherwise start packing and get outta dodge :-P.

  53. julienne says:

    @Buran: Being picky here: Most money judgments ARE dischargable in bankruptcy. The few exceptions include judgments for money obtained by fraud. Must use “magic words” to get a fraud judgment.

  54. trollkiller says:

    @Pylon83:
    The ownership is in dispute because the mortgage company says it has the rights to the property and the landlord says he has the rights to the property. So the mortgage company is suing the landlord. (foreclosure) So maybe I should have used the term “who has rights to the property” instead of ownership.

    And from what we saw from a week ago the mortgage company may not own the property either.

  55. Pylon83 says:

    @trollkiller:
    I disagree. It is clear that the landlord owns the property until the court decides otherwise. The simple fact that they are being sued for foreclosure does not change who owns the property until a judgment is entered granting title to the mortgage holder. Withholding rent or diverting it to a third party may open up a whole different can of worms.

  56. trollkiller says:

    @Pylon83:
    I disagree about the “who has the property rights” issue, so let’s move on to the can of worms.

    The OP said he was summoned, I am not sure why unless it is so he can be informed of his rights and obligations as a renter in this matter. If he places the money in an escrow account like the attorney from Ga. suggests and asks the judge who gets the money, he is off the hook. He is not trying to deprive the rightful party of the funds, he just does not know who the rightful party is.

    The landlord has failed to contact him for the rent, and the mortgage company has failed to contact him for the rent. Like I said earlier we don’t know if the landlord has already turned over the property and walked away. The landlord may not be entitled to the money.

    What happens if the landlord is not entitled to the money but he pays him anyhow? The OP could be on the hook with the mortgage company for the rent he has already paid to the landlord.

    Doing it my way the worst that can happen is the OP is liable for late fees. Something I feel he could successfully argue that due to the lack of communication between the landlord and him he was unable to determine the rightful party to pay. When and if a judge says “you owe this person the rent” the OP will have it at the ready.

    In any case until the landlord gives the tenant a demand for rent the OP has a roof over his head.

    [www.800helpfla.com]
    Non-Payment of Rent
    Section 83.56(3), F.S.
    The landlord must serve you, the tenant, a written notice allowing three days (excluding weekends and legal holidays) for you to pay the rent or move from the premises. If you do not pay the rent or move, he/she may begin legal action to evict you.

  57. Pylon83 says:

    @trollkiller:
    See, you are arguing facts not in evidence. You don’t know what the summons was for, the OP didn’t state it. You are assuming it even says anything about disputed ownership. The tenant does not get to arbitrarily stop paying rent because he got unconfirmed information from a 3rd party that indicate the LL might be under foreclosure. What if I sent him a personal letter saying the LL was being foreclosed on? Any different? The summons is nothing more than a “You/this person is being sued. Show up in court”. It is not grounds to stop paying rent. Until he is officially informed that there is a new owner, he is fully obligated to contiue to pay the current landlord.
    Now that I think about it, the summons is likely a joint foreclosure/forcible entry and detainer action against the property owner and all occupants. The bank was able to ascertain who lived there, and served them. With that in mind, they certainly should not ignore the summons, and showing up to court sans attorney would be a bad idea, and a good way to find themselves on the street faster than anticipated.
    With regard to “being on the hook to the bank for rent already paid”, there is no way this would happen. If the bank never notified them that they were the new owners, they would have no recourse if the tenant can show he paid the original LL the rent.
    Basically what I’m saying is that it is simply not a good idea to stop paying rent because you don’t know whats going on. Until official word is received from the LL, the new owner, or the court in the form of a judgment, the tenant has no business to arbitrarily stop paying.

  58. trollkiller says:

    Maybe you missed where I dropped the disputed ownership argument in my previous post. I see it as being in dispute because it is going to court. If it was not in dispute there would be no need to go to court. With that said I am not going to argue that point anymore.

    Why is it not a good idea for the OP to stop paying rent?

    If his move in was typical of Florida move ins, he had to pony up first, last and security. Yes I am making an assumption. Converted condo in Orlando would rent for $800+ a month. That leaves the landlord sitting at this moment with $1600 of the OP’s money.

    What do you think the odds are of him getting that money back from the landlord? The landlord has already in my mind been fraudulant by not paying the mortgage when the rent was being paid. Do you think the landlord is going to refund the $1600?

    If he follows my suggestion he has that money on hand if the landlord demands it. I don’t think that will happen as it seemed the landlord has walked away from it. How many landlords do you know that would not have contacted you for 2 week overdue rent?

    If the landlord does not demand it (and I would make him take me to court) the OP regains part or all of the $1600 that is still rightfully his.

    The OP can use that money to move and get on with his life.

  59. Tyr_Anasazi says:

    My wife and I live in Orlando and we faced the same situation in 2006, with one difference. The owner hired a realtor who also specialized in property management. So, we had immediate recourse (the realtor relocated us to a better house in a better neighborhood;>).
    In this case, I would advise the OP to bank all of his rent payments in an escrow account. At this point in time, the landlord is still the owner but only a fool would still pay him. By banking his rent he will have access to it if he needs to broker a deal with the new landlord once a judgement has been rendered in the foreclosure or if he should decide to move.

  60. plim says:

    @Pylon83: i was going to say…all these suggestions for trying to recoup the security deposit can’t merit any worth as he’s stopped paying his rent!

    besides, several months of not paying rent surely must have outweighed the loss of a security deposit being returned, unless they payed an outrageous deposit like 6 months =P

    you can’t have your cake and eat it too =P

  61. Darkandtall says:

    You know this is not right the same thing is now happening too me and my wife right now. We have been in the place for about 4Months now . Not knowing this place was in forecloser 2 1/2 befor we moved in and the owner know that it was. And how we found out it one day we where on our way on when we meet this guy in the parking lot and he had some pappers in his hand ..We ask who where he was looking for and said the that he his a SUMMONS…..AND YES IT WAS FOR ME AND MY WIFE..So I need some help with this..What should we do…And P.S Should we still pay our owner

  62. vic411 says:

    All,
    I am going through this in Long Island New York. I signed a year lease on a house and found out first by opening the wrong statement(my landlord has the same bank as I do for his mortgage) and found that he was being warned for foreclosure. I disregarded that at first until someone came here to serve him with papers to apppear in court. The guy gave my wife a copy. I am still unsure as to what to do I am leaning towards putting the rent in escrow and see what happens. The prick hasnt paid his mortgage since July and when I told him I got papers he put on this Oscar winning act that there must be some mistake and he would call me back after he talks to his bank..this is a week ago.

    I would like to buy this house but I have been told its best to wait until foreclosure before trying to buy it ..any suggestions? Also can he successfully ruin my credit if I don’t pay him and would I be able to dispute that with proof that he hasn’t paid his mortgage in over 6 months?

  63. valhallableu says:

    Just my two cents worth. I live in Texas and my deadbeat owner lives in Arizona. The house I signed a 2 year lease on was foreclosed on in January 2010, we moved in July 2009. We went four months without paying rent until Fannie Mae took over and hired a Property Management Company to take over. I sent demand letters to both the deadbeat landlord as well as the Property Management Company hired only to rent the property. We got lucky, I just got my Security and Pet deposit back, not all that I was asking for but I at least got $1645.00 back from him. Beggars can’t be choosers in this situation, so it is possible to get it back. We were planning on suing in small claims which is difficult when you live in two different states. I will be more cautious next time. Renters beware!

  64. rentershell says:

    I live in Illinois and had a process server come to my home on 07/14. I should have expected this as we have had about 5-6 servers come to serve my LL for other properties he was forclosing on (he was a partner in a Real Estate Investment Group). I am at a loss, I really need my security deposit back to move. My lease is up 07/11 and will not have a security deposit until March? Any suggestions?