Renting and just got Notice of Default, what to do?

[Grubbie]

So my fiancée gets home tonight and sees a Notice of Default taped to our front door. Reading through it, the landlord stopped making payments in Sept, so 5 missed payments.

Good thing the one year lease we signed is almost up (end of Feb).

Anybody have any pointers on what to do, legal rights, etc? Or even past experience with this as a renter?

Figure I might need to sit down and talk with a real estate lawyer about our legal rights and what we should do, but figured there has to be some knowledge here


For some more background info, before we signed the lease, we asked if they were planning on selling. Their answer was nope, as they owned this house for over 25yrs and raised their kids in it. Five months into the lease, they offer us first crack to buy it and letting us know they might be putting it on the market. Said no (way to high, no point in buying it and having the cost of ownership be almost twice the rent, gotta love this blog ). They ended up then putting a For Sale sign out front about 3.5 months later (2 months after they stopped making payments).

[rose-colored-coolaid]

You can take two approaches. 1) Get out quick. 2) Try to stay as long as you can without paying a dime.

[mukoh]

Two scenarios.
Trustee sale comes up, investor buys the house, and wants you to remain a renter at current lease, likewise with some banks that I have seen. This scenario will usually be known to you 1-2 weeks before trustee sale.

Likewise someone buys it and shows up by next morning with a notice of immediate eviction, and offers to throw things gently out the window.

If you follow RCCs advice #2 you are still liable for lease payments up to the date of foreclosure. Can be brought to civil court and all the following consequences to collect it from you.

[Grubbie]

I'm guessing we are going to take option 1 It is just more of a hassle as we were hoping to extend 6-7 months (or longer as we really like the place) as we didn't want to deal with a month to month lease with our wedding coming up in the summer.

I see in the Consequences of Default section that without covering the debt in 30days, it may lead to the "publication of a Notice of Trustee's Sale, and the property may be sold at public auction at a date no less than 120 days in the future."

Am I reading that correctly that after the Notice of Trustee's Sale, they are going to put the house up for auction (with nothing else before hand?) at a minimum of 120 days out? When does the forclusure proces start in there.

I'm mostly trying to figure out that we the lease ending in Feb, if we stuck around til then, would it be any issue, or if we leave early once the forclusure process starts and we get notice. But not sure what happens with the foreclosure process and us moving out/kicked out.

[Alan]

- You could try to buy the house on the courthouse steps.
- You could try to contact the bank to prenegotiate rent in case they get the property.
- Ask your current landlord about your security deposit. I think they are legally required to put it in a separate account to return to you. If they didn't you might be able to get away with not paying your last month of rent to them. But don't take my word on that.

[jon]

If the lender is a bank, maybe you can call them up and ask if they would be willing to lease it to you after foreclosure. Seems like most of those auctions just wind up with the lender owning the property as no one is willing to pay off the loan. Having the place occupied is better for them.

[tomtom]

If you're in King County, you can go here to look up the current owners:



and then go here to search for the Notice of Trustees Sale document:



Of course, the NTS document will be mailed to your address soon enough.

[anamik]

I was greeted by a Notice of Default on my door tonight. I am curious about the timeline. It is similar to Grubbie's notice: 30 days to pay the principal and Trustees sale no less than 120 days later. Now according to WA law, the new owners have to give tenants 60 days - is that true for month-month leases? Just trying to plan my move.

[ira s]

Federal law trumps state law, and requires 90 days notice. I am not an attorney, so don't take what I say as the gospel:
http://www.washingtonlawhelp.org/WA/sho ... id/1630300

[Haybaler]

Here is my advice:
Fact. You LIKE living in the property.
Fact. You signed a lease which has consequences if you breach it.
Fact. The Landlord may exercise his rights to file Bankruptcy. The act will delay the Trustee sale for 3 or 4 months at least.
Fact. The notice of Trustee sale puts the EARLIEST date of sale at 120 days after the notice.
Fact. After the Foreclosure sale occurs you will be given another notice to vacate in 20 days.....or 90 days if you have a valid lease and it extends beyond 90 days.
No need to get excited.
Talk to the Landlord. Ask him what his intentions are. Continue to pay your lease payments. Come to an agreement to recoup your deposit int he future. Take good care of the property.
Don't be part of the problem.
Good luck.

[anamik]

Thanks for the feedback. I was planning on moving next spring/summer anyway. This might require a small change in the timeline but I'll talk to the landlord and the bank.

[Haybaler]

Hey!,

I just reviewed the Dates of the postings on this topic. Have you been living in the house since the Notice was posted in January?

Fill me in on the events that have transpired since. And now you stated that you want to stay another year?

What has happened since the posting?

[Haybaler]

Sorry, Anamik, I mistook your post yesterday as a continuation of the Grubbie post from January.

[ira s]

Anamik,
Even if you're on a month to month tenancy, you apparently have 90 days from the date of the auction. That's federal law. so you're probably good til almost April. From the link I posted above:
""What if I am renting month to month?
If you are renting month to month, or if you began your tenancy with a lease that has expired and you are now renting month to month, the new owner is required to provide you with at least 90 days notice before evicting you. In the circumstance of a foreclosure, this Federal law overrides Washington State law, which allows a landlord to terminate a month to month tenancy with just a 20-day notice."

[anamik]

Thanks Ira. That is a good link. I should be able to stay long enough to stick close to my original plans.