I Leased a Property and It Is Being Sold as a Short Sale or Foreclosed…What should I do?
March 23rd, 2010 categories: General RE Info, Rentals, Short Sales, Tips for Sellers
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The Answer is: Consult an Attorney…
From several conversations with attorneys I have gathered the following information. You particular circumstances may differ so please do your due diligence before making any decision.
Is the Property being sold as a Short Sale or being Foreclosed?
If the Property is being sold as a Short Sale and the Lease is current the new owner must honor the lease term. Very often, by the time the Short Sale is approved, the original lease has expired and the tenant is living in the property with on a month to month lease. Beware of oral agreement since they are harder to enforce than written contracts. In some cases the Tenant lives in the property until the amount given as advanced rent and security deposit is exhausted. It is advised to have a written agreement with the owner because the owner’s default in paying his mortgage doesn’t give the tenant the right to default in his rental payments. One of the most common complaints from tenants when they keep paying their rent is either the lack of maintenance to the property. Attorneys always advice their clients to keep paying the Association/Condo dues while the Short Sale is being processed.
A good landlord/tenant relationship is key to ensure a smooth transition. Being it to grant access to prospective buyers and be able to commit with a closing date or transferring the lease to the new buyer.
If the Property is Foreclosed the new owner has the right to request the Tenant to vacate the property. Tenant is normally aware that a foreclosure is taking place well in advance. The new owner can provide the Tenant with a “3 Day Notice” and if the tenant doesn’t leave most likely an eviction will take place. Under some circumstances the new owner offers incentives to ensure the property is left in good conditions and the tenant vacates without the need of being evicted.
If the Property is a Fannie Mae Foreclosure you may get some Help!
Some Qualified renters may be offered month to month Leases and even help to relocate. For additional information:
Fannie Mae Support for Renters
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Thinking of selling your home? Now might be a good time to put it on the market when the inventory of great properties for sale is low. For a FREE market analysis of your property call me at (954) 588-7260 or contact me.
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