Legal Question in Real Estate Law in California
forclose on our ental
we are leaseing a home and just found out it is in de fault and they are 20,000$ behind in payments. we were wondering if we need to still pay rent or can we leagaly but our rent in an escrow account. also if it dose forclose dose the bank have to honor our year lease, or can they kick us out?
1 Answer from Attorneys
Re: forclose on our ental
As to your first question, the landlord has arguably defaulted on his obligation to give you quiet enjoyment of the home, and withholding rent may be justified.
I would also suggest you look at the Civil Code, section 890(a)(1), for the definition of rent skimming, and see if this possibly applies to your landlord. If so, continue to read down through at least 891(d) regarding the rights of a tenant against a rent-skimming landlord.
In a foreclosure, your rights would depend upon two things: (1) whether your lease was 'senior' to the mortgage foreclosed upon or not, and (2) whether the buyer at foreclosure wanted to keep you as a tenant.
Normally, when rental property is sold, the tenant is unaffected except that he or she gets a new landlord. However, a foreclosure sale is different. The lease will be wiped out if it was entered into, and you took possession, after the loan was recorded. If, however, the loan is recent, and your lease date is earlier, your lease prevails over the rights of the buyer at foreclosure, even if the lease wasn't recorded.
Even if your lease is wiped out, it is quite possible the new owner would want to keep you as tenants and you could then negotiate a new lease.