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Author Topic: My Apartment Building Was Foreclosed On - What are my Rights?
Alcon
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I was just told by a property manager that my landlords have been foreclosed on. The bank now owns the building. According to him, my lease is null and void. He made it sound like they probably wouldn't evict us - it's a nice building and we've all been good rent payers - but he did say it was a possibility. Our lease is monthly and goes through August. We were only hoping to stay long enough for my temporary job at GE to run its course while we look for a new job and home out on the West Coast. Incidentially, we just paid our rent for this month (June 11th - July 11th) on last Thursday - the same day I'm told the bank foreclosed. I'm not sure, but I have a suspicion that I should probably be asking for that back right about now.

Also, I found a piece of legislation - The Protecting Tenants at Foreclosure Act of 2009 - which declares that my lease is valid and that at the very least the new owners (the bank) have to give me 90 days notice before kicking me out. Which is enough time to allow my lease to run its course. However, I'm finding conflicting information as to whether or not this bill is law yet and whether or not it has taken effect if it is.

So I guess my questions are, first, what are my rights? Is my lease still in effect or not? Do I have 90 days? And if it is not, do I even have any rights? Second, should I be contacting my old landlord and trying to get this month's rent back from them, in case the bank asks for it?

Anyone else ever been in this situation before? Any advice to offer or nuggets of wisdom?

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katharina
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Is your lease monthly or does it run through August? If your lease is monthly, then the bank doesn't need to give you longer than the original landlord, which would be 30 days.
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rivka
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It depends almost entirely on the laws of your city and state.
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Alcon
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It's monthly, but it runs through August. Its not that we have to renew every month, it's set through August - I think. I'm not entirely positive, the real estate agent who explained it to us has proven to be completely unreliable on more occasions than I can count.
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fugu13
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You might have some recourse against the landlord; he could have been collecting the rent fraudulently (if he knew a foreclosure was impending).

I wonder if I should try to get my next apartment complex to include a clause where they must notify me of any failure on the property owner's part to make a complete mortgage payment . . .

Also, the act you found has only been introduced, not passed. You have no protection under it (since it isn't an act, yet). Immediately talk to a lawyer specializing in this sort of case; they should give you a free referral.

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fugu13
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Also, you should read your lease yourself. The lease will say what the details are. Don't rely on an agent to explain things to you. You are undertaking a legal obligation when you sign the lease, and are only harming yourself by not knowing what is in it.
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Alcon
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We did read it at the time, it was pretty short though. It basically said we'd rent from May 11th to August 11th with an option to extend, but it was titled a monthly lease.


And the part she explained about it carrying over to the new owners was "New York Law".

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Alcon
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Okay, found it, it reads:

quote:
Term: During the term of mo. to mo. from the 11th day of May 2009 to the 31st day of August 2009. Following the completion of the initial term, this lease may be extended month to month basis.

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fugu13
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The lease should have set out who was allowed to terminate the lease when under what conditions. If it said that both sides had the right to terminate the lease every month, then it was just month-to-month. If it doesn't allow the landlord to terminate except in the case of non-payment (or failure to fulfill various other obligations, like paying the utilities), then it isn't.

It looks like you'll have just missed a New York act giving tenants a 90 day or the end of the lease guarantee; that legislation was introduced at the beginning of the month.

edit: I see you found it; it looks like a woefully underspecified but fairly normal lease.

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Alcon
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Yeah, it is woefully under specified, it doesn't specify termination. It says any change must be agreed upon by both parties. It does specify succession, but I can't actually read it very well, I think this is what it has to say:

quote:
Unless otherwise ?stated?, this lease applies to and binds the ?heir executors? administrators and assignees of the respective parties.
It's a bad copy and it's really hard to read... which is unfortunate cause the wording could make a huge difference.
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Kwea
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Sounds like it was a one year lease, with an option at the end to go month to month. That's fairly common, although in practice the landlord usually declares he isn't willing to go month to month, and requires another longer term lease.

I'd contact the bank who owns it now, and I'd take the former landlord to court if necessary to get the money back. I'd make SURE the new owners KNOW (and have proof) that you paid this months rent already.

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fugu13
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The part you quote has nothing to do with bankruptcy situations, I'm pretty sure. Talk to a lawyer, and also start talking to the bank (push to get them to actually respond). If the bank will agree to let you keep your lease going as it was (including making your first payment to them for next month), you're good; it isn't very long, after all, so if you are insistent they're pretty likely to agree (it isn't like odds are high they'll have a buyer by then).
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ElJay
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If you only need to stay through August, you're probably fine. While you should certainly try to talk to the bank, I'm betting they'd rather have the units full than not, and they probably wouldn't get around to evicting you that fast anyway. If it was a house you were renting instead, that would be different. You also might want to check on the foreclosure redemption period. It's a different length in every state, I think, but in MN the owner has 6 months to make good the debt after foreclosure before they can be evicted. Although that might only be for owner-occupied. Anyway, the point is you're not necessarily screwed and should talk to a lawyer or a tenant's advocate asap.
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Alcon
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It looks like we're in good shape. I went looking and found a law that was signed by President Obama on May 20th: Helping Families Save Their Homes Act of 2009. Also known as Public Law No 111-22 or S.896. Title VII Protecting Tenants at Foreclosure Act:

quote:
SEC. 702. EFFECT OF FORECLOSURE ON PREEXISTING TENANCY.
(a) In General- In the case of any foreclosure on a federally-related mortgage loan or on any dwelling or residential real property after the date of enactment of this title, any immediate successor in interest in such property pursuant to the foreclosure shall assume such interest subject to--
(1) the provision, by such successor in interest of a notice to vacate to any bona fide tenant at least 90 days before the effective date of such notice; and
(2) the rights of any bona fide tenant, as of the date of such notice of foreclosure--
(A) under any bona fide lease entered into before the notice of foreclosure to occupy the premises until the end of the remaining term of the lease, except that a successor in interest may terminate a lease effective on the date of sale of the unit to a purchaser who will occupy the unit as a primary residence, subject to the receipt by the tenant of the 90 day notice under paragraph (1); or
(B) without a lease or with a lease terminable at will under State law, subject to the receipt by the tenant of the 90 day notice under subsection (1),
except that nothing under this section shall affect the requirements for termination of any Federal- or State-subsidized tenancy or of any State or local law that provides longer time periods or other additional protections for tenants.
(b) Bona Fide Lease or Tenancy- For purposes of this section, a lease or tenancy shall be considered bona fide only if--
(1) the mortgagor or the child, spouse, or parent of the mortgagor under the contract is not the tenant;
(2) the lease or tenancy was the result of an arms-length transaction; and
(3) the lease or tenancy requires the receipt of rent that is not substantially less than fair market rent for the property or the unit's rent is reduced or subsidized due to a Federal, State, or local subsidy.
(c) Definition- For purposes of this section, the term `federally-related mortgage loan' has the same meaning as in section 3 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2602).

So it looks like they have to give us 90 days, which covers the amount of time we wanted to stay anyway. We're pretty much set [Smile]
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Kwea
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Glad to hear it. [Big Grin]
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