What are my rights as a renter in a home that went up for a foreclosure auction thatwas cancelled due toan attemptedshort sale?

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What are my rights as a renter in a home that went up for a foreclosure auction thatwas cancelled due toan attemptedshort sale?

The house I’m renting was to go on foreclosure auction almost 5 months ago. The landlord said that the foreclosure was cancelled because she’s trying to do a short sale. Does that sound right? I thought a short sale had to be filed before the foreclosure auction? Now, all these months later, my landlord said that she’s still trying to do it. But this sounds wrong to me. So can you please instruct me on the procedure and advise me on what you think.. I feel that she’s lying. And what are my rights as the tenant for a situation like this? Should I be paying her rent still? Is it still her property?

Asked on July 14, 2011 under Real Estate Law, California

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

First, are you current on your rent? If you are, then you are in good shape to remain in the property as a renter even after a trustee's sale on a foreclosure or a short sale. A short sale is when the owner of the property that mortgage payments are delinquent on sells it to a new buyer and the mortgage company whose loan is not being paid agrees to let the sale go through where the mortgage company receives less than what is owed on the loan in the end.

Is your lease more than a month to month lease? If it is, and the property is foreclosed upon, the new owner has to let you live in the property as a tenant until the term of your lease expires. If you are on a month to month lease, to be evicted, you must be given 90 days written notice to leave under new Federal Law.

If there is a short sale and you have a written lease for a set term (2 years as an example), and time is still remaining on the lease, then the new owner is obligated to let you remain to finish out your lease if you are current on your rent. If the lease is a month to month and there is a short sale, then the new owner could give you a 30 day notice to vacate.

Hopefully the above helps answer your question(s).


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