Question:

If owner in pre foreclosure am i still required to pay rent?

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I rent an apartment in southern California. I recently found out the property is in pre foreclosure for the last 2 months! Now I gave the owner $1000 deposit, and $1000 for the last month. So im worried the owner will skip out and keep my money. So I was wondering if im still required to pay rent to this person even though they are loosing the property . I dont want to loose $2000 dollars plus the rent he is still collecting . Thaks for any suggestions!

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  1. it all depends preforeclosure just means he's a little past due, he can get himself out of the mortgage hole, does not gurantee he will lose the property, perhaps you paying $1000 a month is whats making it possible to keep the place, plus are sure you checked your source on finding out if its really forclosing sometimes website do not update their information as fast as they should I have found many houses which were payments were taken over by someone else and online they were still listed as preforclosure.


  2. You are still required to pay rent since you are still living in the property and using the space you are renting. You have a contractual obligation to pay rent in exchange for the living space.

    If you are concerned about the foreclosure, then you have two option: either move out or talk to the landlord about what he is doing about the situation.

    Some landlords are able to stop the foreclosure process before the house is auctioned off, and then you would just be behind on rent if you stopped paying now and he saved the house. You'd probably end up losing your deposit anyway in that case, since that is one reason you had to put down the deposit.

    You can also move out of the house claiming constructive eviction, which means the conditions made it so unlivable that there was no other choice than to break the lease and leave. If the owner doesn't give you the deposit back, you can try to sue for it later on. You'd just have to convince the court that a pending foreclosure was a reason to move out prematurely.

    But you don't just want to stop paying rent unless you have the information about the foreclosure proceedings, what the owner is doing about it, or a game plan for moving out and claiming constructive eviction (which you might want to talk to an attorney about).

    Hope that helps.

    ForeclosureFish

  3. Yes.  You have a contract with the owner of the property that states that you are to pay rent in exchange for a place to live.  So far anyway, that contract is still valid.  You have a place to live and therefore you owe the money to your landlord.  Your contract isn't with the mortgage company or anyone else.  Only the owner of the property.  If you stop paying rent they can start the eviction process immediately.

    Your landlord has a separate contract.  With a mortgage company.  His business does affect you, but it is still his business.  He is responsible for paying on the property so that he has a place to rent to you.  

    CA, which has been hit hard by foreclosures anyway, has become the first state to make it a law that it is illegal to collect rent money and allow a place to fall into foreclosure.  If that is really what's happening, then they risk a criminal prosecution as well as financial ruin.  

    I don't blame you for being nervous and worrying.  I don't blame you for not wanting to pay rent to someone who appears to be about to lose the property, but your contract isn't with a bank, it's with a landlord and you owe that money.  

    How do you know they aren't playing a game with the lender to get a loan modification and then will end up keeping the house?  How reliable is the information you are getting that the house is in foreclosure?  You don't know that they are going to lose the property yet, do you?

    Ask the landlord for an honest update and state your concerns.  Communication is often key in these situations.

    good luck!

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