Question: I rented a house in town on a one-year lease. At the end of the lease I gave notice to my landlord that I wanted to stay in the house and renew my lease. My landlord replied that the house was purchased in a foreclosure sale and that it would be up to the new owner. I contacted the new owner. I expected to hear that he was glad a tenant wanted to renew their lease, but he said that I would have to move because he was not going to lease the house to anyone but had bought it for his son and son’s family to move into. He told me I have to be out by July 31st. He also stated that I owed him money because he never received my rent payments since acquiring the property. I always paid my rent on time and gave it to my landlord personally by personal check. I can’t find a new place in such a short period of time and I certainly can’t pay rent that I’ve already paid. What can I do?
Answer: When a residence is sold it is generally sold “as is.” That means that the buyer takes the house the way it is, including any easements, deed restrictions or even tax liens. It doesn’t mean that the new owner takes the “use” of the property as he finds it. The new owner may do whatever the law allows with the property, which may include renting it out or , but it may not. The state of Texas does not tell the owner of a residence who can reside in the residence or that it must be used as a rental property.
That doesn’t mean that the new owner can violate Texas law regarding rental property in order to take possession of the property. The new owner must provide the same notice to the tenant as any other landlord. Texas law protects tenants, not just landlords. In order for the new property order to take possession he must file a forcible detainer that evicts the current tenant. A person who refuses to surrender possession of real property upon the demand of the rightful owner commits a forcible detainer. One way that occurs is if the tenant willfully and without force holds over after the termination of the tenant’s right of possession (end of the lease), or is a tenant at will or by sufferance, including an occupant at the time of foreclosure of a lien superior to the tenant’s lease; or is a tenant of a person who acquired possession by forcible entry.
The new owner in this case who purchased the house through the foreclosure sale must make a written demand that complies with the requirements for notice to vacate as required by law. Since the property was purchased at a tax foreclosure sale or a trustee’s foreclosure sale under a lien superior to the tenant’s lease a 30-day notice to vacate is required. That is true if the tenant has timely paid rent and is not otherwise in default under the tenant’s lease after the foreclosure occurred. The new owner must give the tenant at least 30 days’ written notice to vacate if the purchaser chooses not to continue the lease.
In this case the new owner has stated that he has no intention of continuing the lease; however stating so verbally does not comply with the requirement to give the required 30 days’ written notice to vacate. If no written notice has been given so far, then the 30 day period has not begun.
It is important that the tenant paid the rent timely during the month of the foreclosure sale and before having received any notice that the a foreclosure sale was scheduled during the month or pays the rent for that month to the foreclosing lien holder or the purchaser at foreclosure not later than the fifth day after the date of receipt of a written notice of the name and address of the purchaser that requests payment. The notice is required when the tenant has timely made rental payments to the place and person specified in the lease, or to the new owner if proper notice of that person was given to the tenant.
Under the scenario given, the tenant was never made aware of the foreclosure but continued to make timely payments for rent to the original landowner stated within a valid lease. No payments have been due to the new owner, unless the tenant was notified to pay the new owner. The rent due for August 1st would still be due to the former landlord without notice; however, the tenant could be said to have constructive knowledge that the owner has changed because of the events that have transpired. At the least, the tenant has until 30 days after notice is given, in writing, to vacate. Until then the tenant is in a month-to-month lease under the terms of the original lease. The tenant should make the August rental payment to the new owner and plan to vacate the premises by August 31st. A tenant could fight to retain possession as long as possible under the law, but the cost and expense of the fight would not be worth the benefit. Ultimately, the new owner is going to be able to evict the tenant and take possession of the property.
This article is meant for informational purposes only and not as a substitute for sound legal advice. Submit questions to Ask the Lawyer to firstname.lastname@example.org.