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?

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

@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

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.

@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.

@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.

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.

@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.

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..."

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.

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...)

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.

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.

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.

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

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]

[www.nytimes.com]

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.

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.

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.

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.

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.

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.

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.

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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.

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

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.

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.

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.

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.

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.

@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.

@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.

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.

@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.

How will not paying his rent affect his credit though?

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.

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