Eviction from home in Foreclosure
We’ve been renting a home for over 2.5 years. Currently renting on a month to month basis. The home has been in pre-foreclosure for many months and entered official foreclosure status about 1.5 months ago. We’ve been very diligent about paying our rent, but now faced with the proposition of being kicked out when the bank reclaims, we’re not too keen on continuing to pay the rent.
I saw a previous post that suggested that our right as renters to peace and quiet enjoyment may be violated through this foreclosure process. Are we obligated to continue paying the rent?
The auction was scheduled for Oct 11th and we just found out that it has been pushed out until Nov. We assume that the owners have pushed it out so they can continue collecting rent (while not paying the mortgage). They’ve threatened with eviction if we don’t pay up, all we owe is for the month of Oct. What are our rights as tenants?
I think they’re bluffing on the eviction procedure, but not totally sure. I know eviction is a bad stain on a person’s credit (my wife’s and my credit score are both 750+) and we want to completely avoid. Is the credit only damaged if the eviction goes through? Is the eviction procedure irreversible?
Re: Eviction from home in Foreclosure
Remember, a foreclosure is an auction, not an exercise in reclaiming. You might want to consider showing up at the auction with a letter of credit and entering the bidding!
As you probably know from reading posts on this site, a foreclosure wipes out all interests in the real property that are junior in time to the interest being foreclosed. If you are renting month-to-month, priority of a lease vs. the foreclosed lien is of no significance; a buyer at foreclosure will have the option to continue renting to you, to ask you to sign a lease, or to evict you.
I’m clear, however, that your question is mainly about dealing with the current landlord. I don’t think you have any right to refuse payment of currently-due rent on the basis of a likely near-future foreclosure when you are on a month-to-month basis. The covenant of quiet enjoyment is not breached, in my opinion, by a foreclosure process that would not materially affect your rights under the month-to-month agreement.
People that want to maintain 750+ credit ratings should focus on keeping their agreements, even if the landlord is an irresponsible sleaze.
If you like the place and want to stick around, I’d say consider being the winning bidder at foreclosure, or having such an impeccable record as an on-time rent payer that the bank, after foreclosure, will beg you to rent from them or maybe buy from them. Banks hate owning foreclosed property, and they hate it even more when the foreclosed property is vacant and not generating rent.
Bryan Whipple
Bryan R. R. Whipple, Attorney at Law
P O Box 318
Tomales, CA 94971-0318