Expert: Ray Beggs - 9/12/2007

Question
I am a tenant 5 months in to an 18 month lease.  We were sent a termination of lease paper (60 days notice) due to the fact that the owners are unable to pay their mortgage.  It is currently on the short sale market.  Our question is, are we required to leave?  It is my understanding of our lease, that if the house is sold, our lease transfers to the new owner?  From my recent research, I understand that a true foreclosure (in the event it doesn't short sell) will dissolve our lease...true?  Basically, I'm interested in what our rights are. The owner is offering us one month free rent.  Is this a strategy to ensure we are out 30 days after we don't pay that 'free rent?'  I'm not sure if it complicates things, but the owner does use a property manager, and all our communication is through the PM.  Any advice will be greatly appreciated.

Answer
Hi Keri,

First off, I'm not an attorney so I can't speak to the legal issues, but I can give you my opinion on what I would do if I were in your situation. I would start looking for another place to live. You could probably push the issue that you've got a lease, but in the end, after 13 months you're out anyway and if the owner can't sell it short, then there is a good chance that he'll let it go to foreclosure and then your lease is null and void anyway.

I would take the landlords one month free rent and use that time to find something else. Believe me, there are plenty of homes out there for rent right now, with this market.

Best of luck,

Ray