questions & answers

Question: I am leasing a house threw a management company and found out that the house is in foreclosure and an auction date has already been set. The way I found out is the attorney for the lender posted the notice on our door not by the management company. I had to let them know. Am I still suppose to pay them the lease payment?

Answer:

Take a look at the Arizona Revised Statutes that are provided online at the Arizona State Legislature's website. Please refer to Title 33, Chapter 6, Article 1 which contains the laws relating to mortgages. A.R.S. § 33-702 contains the information that defines what a “mortgage” is. The mortgage is an obligation established between the person obtaining a loan, and the bank loaning the money to purchase a piece of property. A.R.S. § 33-703 contains the information which allows a bank to foreclose on the mortgage. The bank forecloses on the mortgage because it has not been paid, and can sell the property used as collateral on the mortgage to satisfy the debt. A.R.S. § 33-725 contains the information which allows a bank to sell a foreclosed property to recover the mortgage that has not been paid.

Please be aware that the landlord’s duty to pay the mortgage to the bank is a separate obligation from the tenant’s duty to pay rent to the landlord. The Arizona Residential Landlord and Tenant Act governs the lawful and unlawful behavior of landlords and tenants and can be found under §§ 33-1301- 1381 of the Arizona Revised Statutes. A.R.S. §§ 33-1361-33-1377, deals specifically with remedies for breaches by landlords and tenants. A.R.S. § 33-1367 deals with remedies for tenants based on the landlords’ unlawful exclusion or removal of the tenant from the rental property. You should also refer to the lease agreement that you signed with the landlord when you first moved into the property. You may want to look at the Landlord and Tenant Rights & Responsibilities Article on the AZLawhelp.org website.

There may be other Arizona Revised Statutes that apply to your situation. The statutes offered are intended as legal information only, however Congress has recently enacted legislation that may apply to this situation as well. Please refer to the Protecting Tenants at Foreclosure Act. This Act discusses the effect of property foreclosure on pre-existing tenants of a property. Since property issues can be complicated, you may want to consult with an attorney. See the article "Where to find an Attorney for Specific Legal Advice."