Is it the tenant’s business what the landlord does with their rent? If you’re under the impression the landlord is making a house payment with your rent money, but they’re not, is it your business to know that? What if you know that they’re not, or have suspicion that the sheriff or bank will be knocking on the door in a matter of weeks or months, should you continue to pay the rent? Even if the landlord isn’t obligated to give you proof that he is making the house payment, is it out of line to ask for proof that he is? What if you know the house is in foreclosure, he’s not making the payment, and the bank will be seizing the property? Who gets to ride it out to the bitter end without paying? The landlord or tenant?
As long as the place is kept in acceptible condition I’d have to say it’s none of your business. Of course if you’re under the impression you’re gonna be out on the street I’d be looking for anew place pronto before the sherrif shows up.
Now as to the legality of the situation? I have no idea in tennents can be evicted without notice if the landlord defaults. It souind like you’re renting a room in a house though which makes it a lot more complicated.
If the landlord no longer owns the property, as it is in foreclosure or bankruptcy, then you sure as hell have business knowing who and what your rent is doing.
I’m going to say no. You’re not paying for the house itself, you’re paying to live in the house. As long as you can live in the house, the landlord has fulfilled his obligation to you and you have no legal right to refuse to pay him or to question how he spends the money you pay him.
There is no clause in any residential lease arrangement I have heard of for the tenant to be entitled to that information. Should the landlord be able to review your monthly budget to be sure you are setting aside the necessary amount for rent?
Our building was in foreclosure because the psycho landlord wasn’t paying the mortgage (or the water bill). And no, we didn’t have any real recourse, because we didn’t have a lease. We didn’t lose our rights, but basically that amounted to them needing to give us 90 days notice if we lost the rental. If you do have a lease, there are a few things you can do, like putting your rent into an escrow account (with proper written notice to the landlord, I’m sure) but they probably vary by jurisdiction.
We rode it out, and eventually someone bought the building about a year after we found out it was in foreclosure. We were lucky in that he wanted us to stay as tenants and didn’t jack our rent up sky high.
Oh, lovely. Apparently the building I rent in is being foreclosed on.
No, you are not entitled to know what he’s spending your rent on. Same as your boss is not entitled to know what you spend your paycheque on.
It’s not the tenant’s fault the house has changed hands, and he cannot just be flung into the street by the new owners. Tenants still have to be given whatever the jurisdiction decides, 30/60/90days, notice to vacate.
When you decide to stop paying rent, is entirely up to the nature of your character. I’m pretty sure, if you time it right, and you’ve guessed correctly, (about foreclosure being nigh), you could manage to avoid a couple of months rent. But you owe someone the rent, regardless, and aside from, whether they will bother, with the nuisance of chasing you down for it, when they’d really rather just be rid of you.
(This is how it is where I live. I assume it’s similar elsewhere. YMMV.)
If I was concerned that my place of residence was going into foreclosure, I’d investigate that, but beyond that, it isn’t your business what your landlord does with your rent. As long as he keeps the place up to minimum code for your area, he can do whatever he wants with your rent. If you want more than minimum code, your recourse is to find a new place to live with a landlord who doesn’t spend all the rent on hookers and blow. 
And yes, you do have to keep paying rent until such time as you are given legal notice to vacate the premises or you give legal notice and move out. Having your place of residence sold doesn’t always mean you’ll be kicked out; sometimes a rental property is sold to another landlord, who wants to keep the tenants (like above).
You’re paying rent in exchange for a place to live. As long as you’re getting the place to live, you have to pay for it regardless of whether you agree with how the landlord uses the rent you pay them.
I don’t know where you are, but in my state (Arizona) landlord tenant law addresses required disclosure regarding foreclosure. If at the time a lease is signed the landlord knows the home is in the process of being foreclosed they are required to add a clause to the lease stating "this home is currently in foreclosure. A trustees sale is currently scheduled for (date/time). For further information regarding this foreclosure action contact (county recorder’s office or the court handling the foreclosure if it’s a judicial foreclosure)."
If you are renting a home that is foreclosed on and auctioned or repossessed, you have specific rights under the Protecting Tenants at Foreclosure Act of 2009. A foreclosure is effectively a sale, and the new owner must either honor your lease agreement or negotiate a breach of that contract with you. Typically a bank will offer $3,000 cash for keys. An investor will offer as little as possible, likely only renting a truck and having someone help you move. A private owner who intends to occupy the home can give you 90 days notice to vacate.
At any rate, as long as your landlord owns the property (and they will until the foreclosure is complete and the home is auctioned) they are entitled to collect rent. If you fail to pay they have the right to evict you and be awarded a judgement for unpaid rent, possibly even unpaid rent until the end of the lease term. Depending on how soon the auction is and how expensive it is to file an eviction suit, they may or may not pursue action. Foreclosure can take as short as 6 months or as long as several years without making a payment, so if they have only missed a few payments and could expect to take in tens of thousands of dollars in rent before the final auction it’s pretty likely they will file suit, get a judgement, kick you out, and find a paying tenant.
Executions (court orders, power of sale, forclosure, seizure, garnishment) are usually public, so if you are concerned that your landlord might not be paying the bills with your rent money, see what executions are out there against him. If there are any, get ready to move as soon as the lease permits. If the lease cannot be broken, have one of the landlord’s creditors garnish from you so that your rent money goes to the creditor rather than the landlord, and then ask the landlord to let you out of your lease.
IANA lawyer, however many people seem to confuse the “law” with what they believe is “fair”. As others have pointed out, your agreement is with your landlord. Unless there is some law on the books that states otherwise, his contract with the bank or whoever is none of your business.
Now if you suspect the landlord no longer has ownership of the property, that’s a different matter.
It is very easy to look up the mortgage in the county records and see if there is an assignment of leases and rents that has also been recorded. If there is, that document gives the lender the right to collect the rents and assigns the leases to the lender the minute the borrower defaults. Many lenders are slow to exercise this right, but if you approach the lender it can speed up the process.
Sorry if I mis-phrased in the opening, I certainly would not care what any landlord of mine does with the money I pay him, I certainly didn’t mean for it to be an ethics question along the lines of “Do you feel comfortable paying a person money you know goes for drugs or prostitutes…?” It was meant to absolutely be confined to “I pay the landlord, he pays the mortgage. Any profit is his to do with as he pleases.”
Since I originally posted, I have seen evidence that the situation the landlord has hinted at has been caused by a failure to make multiple house payments over the past three years, causing the account to be behind (not by much, but enough for the bank to notice and want it brought current). This started before I rented the house, and continued into the present.
He made claims that the house payment suddenly rose, the insurance went up, and all sorts of suspicious sounding flim-flam that made me investigate the true reasons behind the suggestion that we may have to move. I found that the situation was directly caused by him not making payments, even though we handed over more than enough on some of the months the payment was skipped. I did have an expectation that he would take my payment, clear a little profit and pay the mortgage. Didn’t happen. He’s not a professional landlord, and I know that my rent is not a major or main source of income for him, so I certainly expected him to pay off his house with my payment rather than blowing the money or even depending on it to buy groceries.
He has now told me that he does want us to stay if he sorts out the problems with the bank. But he may not, and it may go into foreclosure and he may walk away from it. I believe that he certainly does need us to stay if he is serious about keeping the house, since he wouldn’t be able to afford to play catch-up and maintain the payments with a lapse in rental income, even for a month or two.
I dread the thought of moving, so I feel I may have three months or so to do it in, if I have to. So I’m trying to get some sort of plan together, and I’m considering approaching the bank if I get the word that the foreclosure is a go. I’m sure there is no way I could get a home loan if I just approached a bank cold and applied. Has anyone heard of a tenant taking over a foreclosure that they were renting that the landlord walked away from? My area is full of abandoned and foreclosed homes that are falling into disrepair, surely a bank would want to work with someone interested in buying a place where they already live and have been consistently paying more than what a house payment would normally be.
Any thoughts?
Why not offer to buy the property from the owner? He might be in the position to dump it for less than the bank will ask if equity is on his side. Here is some information on tenant rights I found. http://www.ehow.com/info_8085997_indiana-estate-foreclosure-tenants-rights.html
Is short-sale the right term? Maybe you could start making an arrangement like that to buy out the property.
I can understand your feeling disappointed (and even misled) that your landlord didn’t make his mortgage payments when you made the rent payments, but I think you have to get it straight in your head that the two aren’t related in any way. You have an agreement with your landlord to pay $X in rent each month; your landlord has an agreement with his lender to pay $X in mortgage each month. There is no cross-contamination.