When can we move without breaking our lease if landlord in foreclosure (just posted, sale 4/7) in Texas?
May 8th, 2011 | 
Author: We just found out Saturday that our landlord is in foreclosure via a letter from an attorney. Monday, the landlord said it was a big mistake and they just hadn’t paid property taxes yet. Checked public records and that turned out to be a lie. Landlord is MIA now. I checked pub records again today and the house was officially posted Monday (after I’d already checked), set to auctioned on April, 7th.
Rent is due on Friday but we need that money to move. When can we move without defaulting on the lease? The Tx Property code says the lease is void once foreclosure TAKES PLACE…Since it’s been posted already is our lease void or do we have to wait until April 7th?
The landlord is a huge liar (confirmed through pub records), and had a suit against him for non-payment of rent / eviction in Nov. Obviously HE was renting a house and defaulted and HIS landlord sued him and won ($8,000). What can we do? We don’t want him suing us for breaking the lease!!
Spoke to a real estate attorney, but he said that we’re basically screwed….
Getting married in 57 days and have a non-refundable honeymoon booked in 58 days!!!
Posted in Landlord Tenant Law
Best to listen to the attorney.
Did the RE attorney give you info on what happens after the foreclosure auction? Usually there is at least a 30 day period from notice of foreclosure to eviction. As was pointed out, you do not owe the former LL/owner rent AFTER the foreclosure, so you potentially have a 30 day period to live rent free and use that money to get another place.
I’m going to guess that this is not (unfortunately) as unusual as it should be. You shouldn’t have it held against you that the property was foreclosed on. You might want to hold on to the paperwork, in case your next LL asks to see proof why your previous LL can’t vouch for you.
You can always try withholding the rent, roll the dice and see if you get sued by the LL. You might want to put the rent money in a separate account so that if LL does file, you have the money to pay.
And, remember you can probably kiss your security deposit good-bye.
Good luck.
There is a lot of people who rent out properties, collect the deposits and rents, do not make the payments and let it go to Pre-Foreclosure, but then pull it out of Foreclosure before the auction takes place by reinstating the mortgage. At this point the renter has moved – then they start the vicious cycle all over again and have made a pretty penny in deposits that are never returned.
FNMA and Freddie Mac backed loans had/have moratoriums in place for people in your situation. You can check the websites of those investors as well as GNMA, Bank Owned Loans, etc.. (if you know who the servicer is). It may be hard going if you don’t have the loan number and you’re not authorized on the account so that information can be discussed however, it may give you an idea of what your recourse may be available.
At this point if you do what you need to so that you have a roof over your head next month I assume that you would have a good fight. Be sure you document everything and keep whatever documentation you’ve received from the attorney and bank for your records, as well as copies of cleared rent checks.. This guy has a track record —- on record.
I would also suggest that you talk to a Foreclosure attorney about your rights and how the foreclosure laws in your state/city/county impact you – time frames from actual Foreclosure auction to Eviction and if that applies to you as a renter. If the eviction takes place, when the doors are locked all property inside the property becomes property of the new owner – whether it’s the bank or a 3rd party. If it’s the bank they will not let you inside the property (in most cases) to retrieve your belongings. If it’s a 3rd party you’ll have to negotiate the release with him/her. The sheriffs department will usually serve the eviction papers with a week or two notice after the foreclosure auction has taken place or as the Redemption Period comes to an end (something else to discuss with a foreclosure attorney).
It’s a hard lesson to learn. Good Luck with your wedding.
Your attorney has interpreted Texas law correctly. Your lease is terminated at the time of foreclosure, which is April 7. Until ownership changes hands from your current landlord, your lease is still valid and binding.
You can move any time you want to move, but you need to pay rents up to and including April 7.
NOPE- His foreclosure has NOTHING to do with your obligation to pay the rent. MIA or not, if you don’t pay the rent then he can legally evict you for non-payment. Even if you are planning on moving anyway, that eviction will ruin your credit and rental history and make it very hard to get that other place.
Your lease is void as soon as the lender officially takes ownership. That can be months after the initial paperwork is filed.