Sherrifs Deed Encumbered By Lease?
If a property in Texas is bought at tax auction, what duty does the purchaser have to maintain a lease during and post redemption period?
(Please give Texas Statute Ref. If Possible)
i.e. The purchased property was leased 2 years ago for a 25 year term to the neighbor for $1.00 per year.
How could anyone find this in advance? Ive never seen a tenant lease at CC office.
Interesting question...anyone have an answer. I do realize this is state specific but some general information would be helpful.
In Alabama we have no duty to maintain a lease when there is a sheriff's sale. It is considered a judicial sale and the lease and tenacy is terminated when sold. Don't know how the law is in your specific state but here is one of the laws which lets us in AL. know that this is so, pay attention to the bottom half of the law:
The tenant at will is entitled to his emblements, if the crop is sowed before notice to quit by the landlord, or the tenancy otherwise suddenly terminated, as by sale of the estate by the landlord, or by judicial sale, or death of the landlord or tenant.
A five second Google search found the Texas statutes at http://www.capitol.state.tx.us/statutes/pr.toc.htm. There's a search function. Might be a good place to poke around, using appropriate legalese. This might be a question for a good attorney though.
My guess would be once redemption ends, the lease would too (or at least could be renegotiated) as the prior owner's interest in and responsibility for the property will have ended. If it's a recorded lease, the lessor should have been notified of the sale. You might want to talk to them, hint about the changes, get a sense of how they might react to your plans for the property. They obviously got a good deal, and may be expecting something to go wrong.
I bought some occupied apts. at a tax sale recently (no redemption period here) and I just started running and fixing them and collecting rents myself the next day, even though I didn't get the deed back from the state for a month. So, legalities aside, you might just want to take charge, if tentatively at first, and let them show their hand if they have problems with it. At the very least, sounds like you'd have a case for having the lease set aside (thrown out) as being bogus--perhaps in anticipation of the tax sale?--and for being way undervalued...assuming it is. Any idea what the former owner got in return for leasing it so cheaply? They must have made some deal.
DaveTexas---------------------
In TX, the tax sale purchaser has right of possession to the property as soon as the sheriff's quit claim deed is recorded. So you can start collecting the rents after that point.
Also, the tax sale in TX is a judicial sale, so this supposed leasee should have been included as a defendant in the tax sale law suit. If that were so, the lease is wiped off by the tax sale. You can check the situation by looking at the tax sale law suit. Was the leaseholder included as a defendant?
If not, I'm not sure what the legal situation might be. Consulting an attorney might be appropriate.
This supposed lease deal sounds to me like a phony baloney matter. Probably put there to attempt to deter investors from bidding.
Good Investigating and Investing*************Ron Starr**********
As I understand it... the lease would be void. As the new owner, you can negotiate a new lease or evict the tenants. A tenant would only have rights to a lien, if the property was sold by the previous owner with a lease in place, but not if foreclosed on.
You better be sure. I lived in Texas for 13 years and I was going to buy a foreclosure but was told the lease is still intact after foreclosure. Check with a lawyer to be sure. If I had bought that house there was a negative cash flow on it and a year left on the lease so check with a lawyer to be sure.
coneclare