Legal Question in Bankruptcy in Connecticut
Buying house in foreclosure
I am currently renting a house in Connecticut from a landlord who has recently filed for bankruptcy in California, the state in which she has been resident for over six months.
I was notified in March that the 1st mortgagee had filed a foreclosure notice on the house I'm renting and wrote to my landlord asking whether I should pay the rent to her or to the bank. She has failed to respond to this request; consequently, no rent has been paid, nor requested, since March.
What are my legal obligations, and how should I handle the rent situation? It seems to me she may want to AVOID receiving rental income at this time. If true, is that a fraudulent action on her part, and what are my potential liabilities, if any? Also, I would like to buy the house and wonder if I should deal with the bank or with my landlord?
2 Answers from Attorneys
Re: Buying house in foreclosure
If the bank has taken no further action to collect the current rent, I would take no further action. There may be a liability by the owner (in California) to have you pay rent, it is unlikely that they will sue you for the obligation. The bank has a right within its mortgage to collect rent, but they will have to take an affirmative act.
As to the opportunity to purchase the property, the first step will be to contact the bank's attorney as ask them what step should be taken. Likely, the bank will not be willing to accept any purchase offer until it takes title. The other alternative would be to find out if the owner would be willing to sell the property, subject to the bank's approval. One of the missing facts is the value of the property and the amount of the mortgage. If there is equity, then the bank's foreclosure will likely be by a foreclosure sale. Then you, and anyone else, can bill on the property. You will have to discuss this issue with the foreclosure committee when he/she is appointed. If no equity, then go to the owner, and see if you can make an offer, subject to the bank's approval.
Good Luck.
Re: Buying house in foreclosure
It appears your "landlord" no longer has any rights in the house. Those rights have passed to the landlord's bankruptcy Trustee and then will pass to the holders of the first mortgage (the bank). No obligation is owed the landlord. To purchase I suggest starting with the bank.
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