Tenants are caught in middle of owner's foreclosure
Q. My husband and I have been renting the house we live in for the past 3½ years. We have had no problems and enjoy living here.
This week, the owner told us he has not been making his mortgage payments and he is being foreclosed on. We know he has had some medical problems and has not worked much the last couple years.
What does this mean for us? Can someone come to the door and demand we leave? Will we be given time to move? We have three kids so moving will not be easy and many arrangements (school, etc.) will have to be made. This has us very worried.
A. If you are worrying about someone coming to the door and demanding you leave immediately, you can stop worrying. The Protecting Tenants At Foreclosure Act of 2009 provided tenants in your situation certain legal rights. The most significant are:
1. If you have a written lease, you can stay for the duration of the lease. The exception to this rule is if the purchaser at the foreclosure sale intends to occupy the property, with proper notice, demand can be made upon you to vacate the property within 90 days.
2. If you do not have a written lease, generally you are deemed a month-to-month tenant. Month-to-month tenants must vacate, upon written notice, 90 days after notice is given by the purchaser at the foreclosure sale.
From a practical standpoint, you may have much longer than stated above. If the foreclosure action against the owner has not been filed (often it is months of nonpayment before the action is filed) or if it is in the early stages, it will be some time before judgment is entered and either of the above meters start running. In addition, the foreclosure sale, which triggers these time frames, cannot occur until at least three months from the date judgment is entered or seven months from the date the owner(s) are served, whichever is longer.
My advice would be to contact your owner to determine where he is in the process. You may find you can remain in the property far longer than you think, although it would appear ultimately you may be required to move. In many circumstances, however, the tenant enters into an arrangement with the purchaser at the foreclosure sale to continue to lease the property.
Q. I just learned that in 2009, a Lis Pendens was recorded against my property. I'm pretty sure it was done by the guy that remodeled our kitchen. We had some major disputes during the project and our relationship did not end well.
I am trying to refinance and am being told I must have this removed from my title. How do I get this removed?
A. A Lis Pendens is notice to the world that there is impending legal action involving the property. It's purpose is to protect innocent parties (usually prospective purchasers) from becoming unknowingly involved in property that is about to become embroiled in legal proceedings.
In your case, it would appear it was filed in contemplation of the filing of a mechanics lien. The good news is mechanics liens against owners of owner-occupied property must be filed within two years from the date work was last performed. Presuming your contractor has never filed anything, he no longer has the right to record a mechanics lien against your property.
Contact the party that recorded the Lis Pendens and demand it be removed. If that is not successful, speak to a title officer at the title company that will perform the title work for the refinance. Given the age of the Lis Pendens, they may very well waive this exception and your problem is solved. If neither of these work, you will probably be forced to file a Quiet Title action against the party that recorded the Lis Pendens.
• Send your questions to attorney Tom Resnick, 345 N. Quentin Road, Palatine, IL 60067, by email to tdr100@hotmail.com or call (847) 359-8983.