This question is asked more and more on a daily basis. It is advisable that before you rent, you should ask the landlord how long he or she has had the mortgage, and whether they have borrowed against it. If it is an old mortgage and the owner has not borrowed against it, chances are better that he is in a good financial situation.
It is also advisable to check the county clerk's records (for Miami-Dade County, www.miami-dadeclerk.com or for Broward County, www.Clerk-17th-flcourts.org) and see whether or not any foreclosure action has been filed against the landlord. Another idea, is to ask the landlord for his or her credit report. However, you can probably expect great reluctance on their part, since this is confidential information which may be abused by a potential renter who is not even serious about renting the dwelling. You may also consider asking for a clause in your lease which requires the landlord to pay moving costs if you are forced to move because of foreclosure or other financial problems of the landlord which may relate to repairs or conditions that may make the unit uninhabitable.
If you are served with a copy of a foreclosure action because you are a "tenant in possession," you must send back an Answer so that you will be kept updated on hearings and other developments. The form of the responsive pleading should include the case number, style and caption, along with your name, address, and phone number. You don't have to panic, you will have several months of notice before eventually having to move, assuming that the foreclosure proceeds. If you want to stay in the rental, it may be advisable to ask the lender if it is willing to let you remain there and pay subsequent payments to them. You might be able to work out an agreement, at least temporarily.
If the foreclosure forces you to move before your lease expires, you should ask the landlord to pay any moving and related expenses. If he or she refuses, consider suing them in Small Claims Court. Of course, even if you win, the landlord may not be collectable on what he or she owes you, at least not right away. After all, they cannot afford the mortgage or the upkeep on the rental, and it is doubtful that they will have these extra sums.
If the foreclosure is costing you a lot of money, because you paid a lot of advance rent or an extraordinarily large deposit, you should consider hiring an attorney. Under Florida law, your landlord may be forced to pay your attorney's fees. This is only if you win, only if he or she is collectable, and only if the lease provides for attorney's fees and/or you can use a statutory basis, such as Florida Statute 57.105 in order to assert your claim for fees.
With the passage of time, the issue of whether to continue to make regular monthly rental payments may arise. Many lawyers and even judges differ in their opinion on how to handle this issue. Some think that you should stop paying your landlord as soon as you are notified that there is a foreclosure action. Others say that it is better to keep paying. The answer may depend on the details of your case. It may be a good idea to talk to professionals, such as lawyers, realtors, or property managers. Typically, I always say as long as a contract is in effect and the landlord is providing you with a dwelling, that your obligation to pay that landlord continues until such time as that dwelling may not be available to you, or the Court issues a mandate to the contrary.
Also beware that many attorneys may not be interested in handling or getting involved in cases of this nature due to the fact that there is the potential for complications on a case-by-case basis, and there is very little compensation for a large expenditure of time.
I hope that you find that this e-mail has been informative. I am not explaining anything new, but may have provided a new wrinkle or way of looking at an old, but new problem.
*This article was reprinted with the permission of Joseph M. Dobkin, Esquire. All rights reserved. I advise anyone who might need legal help to consult the services of an attorney, such as Mr. Dobkin.
Regards,
Noel Padilla
Kendall Short Sale Foreclosure Specialist
