This morning I got a misdelivered piece of mail that said the house we are currently renting is going to be sold at public auction on Friday. Needless to say, this was news to me.

From Googling, I think my lease has to be honored by whomever buys the house, but I'd like to be sure. Tomorrow I'll get in touch with a local lawyer, but if anyone can put my mind at ease today I'd certainly appreciate it. The thought of having to move by next weekend makes me physically ill.

Yikes. I have no knowledge in this area, but I wish you the best of luck!

This morning I got a misdelivered piece of mail that said the house we are currently renting is going to be sold at public auction on Friday. Needless to say, this was news to me.

From Googling, I think my lease has to be honored by whomever buys the house, but I'd like to be sure. Tomorrow I'll get in touch with a local lawyer, but if anyone can put my mind at ease today I'd certainly appreciate it. The thought of having to move by next weekend makes me physically ill.

I have no knowledge of New York laws, but in California, usually there needs to be an agreement between the lessor and the beneficiary on the deed of trust in which the bene agrees to honor the lease (more or less). From what I can tell, it is far more common with commercial property (which is what I deal with) than residential, though.

I would actually guess that there will be laws in place to protect residential lessees to an extent. Also, it's likely that if the place is foreclosed on, it will not be bought by a bonafide third party, but probably retained by the bank itself (the bank won't be interested in letting another bid take the property unless its debt is covered by the bid, or it is convinced it won't be able to resell for more money at a later date). If the bank owns it, I would guess they would rather you stay, as you are more likely to keep the place in good shape (banks aren't set up for house maintenance).

Is your lease with the lessor yours originally? Or did you receive the lessee's interest from a prior lessee? If you are the original lessee, I would think you be aware of a document protecting your lease under foreclosure, so I would think one then doesn't exist. But if you took a "hand me down" lease, at it were, I'm not sure any prior party is required to reveal that to you. It would be shown on your insurance policy.

Speaking of which, if you can find your policy (assuming you have one), I would take a look at that if I were you. The deed of trust being foreclosed should be disclosed there, as should any subsequent agreements affecting the lessee's interest, up to the policy date.

Title insurance in New York, though, is a whole different monster from California. While we primarily use title officers out here, my understanding is, back east, it's usually done by lawyers. I have a low opinion of title work done by lawyers out here, but I would imagine in New York, they would be much better at it.

I don't know if any of this necessarily puts your mind at ease. But I'm willing to offer whatever long distance perspective I can provide (keeping in mind again, that New York is entirely different than California, I fear).

I read a NYT article that said NC and NY have laws that force buyers to honor most leases, but I can't find any clarity on what "most" means.

There's a lot of other shittiness involved here. While I have had no complaints with our landlord, according to the letter the house was foreclosed in August 2009. I'm not sure if that means the bank took possession at that time or not, but we've been paying rent on a foreclosed house for most of our lease. I'm also nearly certain the lease was signed while the house was in the process of foreclosure. We signed in late June and I can't imagine foreclosure went so quickly as to be started after that.

Looks like tomorrow I have to find a good attorney. I was hoping the realty agency we used to find the house could help, but they weren't open today.

This link might be pertinent, although it is non-specific to New York case law or New York itself even. Just a general review of lessee's rights under foreclosure. But it might be worth a read:

http://leases-and-leasing.lawyers.com/landlord-tenant-law/Lessees-Rights-on-Foreclosure-and-on-Sale.htm

I think you're going the right direction, though, to immediately find a lawyer, preferably a real estate lawyer to help you with this.

I read a NYT article that said NC and NY have laws that force buyers to honor most leases, but I can't find any clarity on what "most" means.

There's a lot of other shittiness involved here. While I have had no complaints with our landlord, according to the letter the house was foreclosed in August 2009. I'm not sure if that means the bank took possession at that time or not, but we've been paying rent on a foreclosed house for most of our lease. I'm also nearly certain the lease was signed while the house was in the process of foreclosure. We signed in late June and I can't imagine foreclosure went so quickly as to be started after that.

Looks like tomorrow I have to find a good attorney. I was hoping the realty agency we used to find the house could help, but they weren't open today.

Hmm, what exactly was the purpose of the letter? Is it just a notice, or is it some form of certified legal documentation?

If the house was actually foreclosed in August 2009 and it's going to sale this week, that would be two separate foreclosures, I would think. I'm not sure what the purpose would be in revealing the August 2009 foreclosure, since it wouldn't have an effect on the new foreclosure. Are you sure that it's not actually saying that foreclosure proceedings began in August 2009? That would make more sense to me, given the timing.

Is your property owner (the lessor you signed your lease with), is he/she the individual owner of the property, or is was it a company/developer that owns all of the underlying property in your neighborhood?

I would agree, if the house was actually foreclosed on in August 2009, it would have been in the foreclosure process as of June 2009 (which would have been disclosed on your owner's policy, presuming you have one). Even not knowing New York's real estate laws, I can't imagine a state having foreclosure proceedings that last less than 4-5 months, with all the notices usually required.

Are you paying the lessor directly on the lease? Or did you take out a leasehold mortgage with a bank, and the lessor essentially has his money already?

The letter is a Notice of Sale from the Supreme Court - County of Orange. It starts with:

Pursuant to a judgment of foreclosure and sale duly dated 8/13/2009

Our landlord is the individual owner of the property and we pay him directly. Our lease ends at the end of June, but we also have an 1800$ deposit we need to get back.

The letter is a Notice of Sale from the Supreme Court - County of Orange. It starts with:



Our landlord is the individual owner of the property and we pay him directly. Our lease ends at the end of June, but we also have an 1800$ deposit we need to get back.

Ah ha, got it. Now some things make more sense to me. You're essentially renting, then, right? I was thinking you were an owner fully leasing the property for a lengthy amount of time (99 years is common in California, but the point of the term is always to suggest the lease is more or less permanent, at least for those involved directly in the initial lease). And so you wouldn't have bothered (nor should you have) with any title insurance.

It appears that the court basically gave the creditor the right to sell the property in its August 2009 judgment, but the creditor couldn't put it to sale right away (usually that means the current owner/your lessor forestalled things by declaring bankruptcy, a common delaying tactic in California).

As essentially a renter, I think you'll be okay through the end of your lease. I would imagine any eviction process begun by a new owner would require more than two months to carry out the process. My understanding is that, pretty much everywhere, it takes forever and a day to actually evict someone.

As to your deposit, that enters ground I am completely unfamiliar with and I definitely recommend you at least see a real estate/renter's rights lawyer about that. Also, did the notice of sale say who the creditor is? You might try contacting them and see if they can provide you with any clarity on the situation.

BTW, was the deposit negotiated separately, or is it directly written into the lease? If the latter, than I would imagine you stand more of a chance of getting some of that money from the bank, if they are choosing to honor the lease, as that would seem to be a provision of the lease they would be required to honor along with the lease in whole.

Oh, and FWIW, good luck with this. My gut says you'll be fine on everything except the deposit. The deposit I am completely unsure about. But I think you'll be fine otherwise.

Sucks you have to deal with this, though. Hope it works out for you.

Thanks. I think I'll be fine, but I'll be happier when a NY lawyer tells me I don't have to move soon. As for the deposit, I don't know, but I figure having a lawyer will help me get back some of that. The creditor is Wachovia, but I don't know if they'll have the house after the auction.

Thinking about it, if NY forces buyers to honor leases Wachovia may have delayed the sale until our lease was close to running out. For all I know our landlord may have leased it to us hoping it would give him more time. Regardless, I still find it odd that we've been paying a guy that doesn't seem to own the property.

Thanks. I think I'll be fine, but I'll be happier when a NY lawyer tells me I don't have to move soon. As for the deposit, I don't know, but I figure having a lawyer will help me get back some of that. The creditor is Wachovia, but I don't know if they'll have the house after the auction.

Thinking about it, if NY forces buyers to honor leases Wachovia may have delayed the sale until our lease was close to running out. For all I know our landlord may have leased it to us hoping it would give him more time. Regardless, I still find it odd that we've been paying a guy that doesn't seem to own the property.

Well, again, I'm not too familiar with NY laws, but I doubt the presence of a lease has held it up. Your lease is a relatively short one, but leases are often signed for decades. It would seem to be unreasonable to the creditor for the mortgagor in default to bve able to continue not paying in perpetuity just because of a lease. Also, there is usually a time period limit for how long a property must go to sale after its foreclosure is allowed by the courts. Usually a sale will be posted in weeks--even days--after the court gives the go ahead. So a break from judgment to sale of some 8-9 months says something else got in the way (and Like I said in California, usually that's a bankruptcy on the part of the current owner).

As for that last, from what I can tell, the guy you're paying still owns the property. It's his until it officially is sold at auction and a trustee's deed (or the NY Version of it) is recorded in county records.

I would imagine you'll receive some sort of notice of how to continue paying on your lease after the sale goes through.

You may want to contact Wachovia before the sale, or at the very least immediately afterward to determine what happened there. I can see a possibility where the sale happens, you don't get contacted right away by the new owner, and you send away your rent check to the original owner. If this happens, I can see where that check you sent is essentially lost money--the new owner will consider rent to not be paid (with attached consequences), while the old owner will just be treating it as found money.

Did you pay rent for May already? If not and you are worried about your deposit talk to the lawyer before paying May and June's rent. You may not get the deposit back but at least you can save the equivalent there.

We have paid for May but are considering holding June's.

I seem to remember something about this on the Peoples Court. Might even have been for NY. I think the new owner, when they purchase the property, assumes the lease. As well as the responsibility for the return of the security deposit.

An update.

After several calls and a few emails I found out that Wachovia transferred the house to Fannie Mae(I don't know how or why). Fannie has a local foreclosure broker that I found and who has been extremely helpful.

According to him NY laws so favor the tenant that I have three possibilities for resolution; Fannie can offer to extend the lease, I could be asked to leave and given a 90 day notice to quit(only after which eviction could start), or we could be offered cash to leave early and avoid eviction. Although the idea of staying for several months rent free is appealing, we'd really like to stay for a year and pending a discussion with the local property management company, that's what we are going to do.

However, our foreclosed landlord wants his June rent, to which I said, you have to be kidding. He's playing dumb and saying he had no idea the house was sold. I now have a copy of the Referee's Deed that makes clear the house was indeed transferred to Wachovia.

A couple of other interesting points also caught my eye.

The court filed the first foreclosure papers on 2/11/09, roughly 4 months before we signed a lease.

The house was indeed foreclosed in August of 2009, but wasn't sold until last month. (I don't know why there was such a delay.)

The total balance due is 337,589.25. It makes me wonder if he ever made a payment.

Also, my wife contacted the water company as water was paid by the landlord and found out that he had never paid a water bill in the three years he owned the house. In NY they can't shut off the water, but the total due is added to property taxes each year. Of course we also found out that the landlord hadn't been paying property taxes either.

damn - hella landlord there JPhillips