Best advice – See the lawyer first. $ 200 is a small price to pay to find out what your rights are.

My gut tells me, regardless of what the PM says, they are liable in some capacity. Just because they didn’t know the situation doesn’t mean they shouldn’t have known. PM’s are required to be licensed real estate agents (unless they are the property owner themselves) and as such, they fall under the laws regarding real estate transactions.

The owner of the property sounds like he committed fraud in not disclosing the status of the property or his financial situation to you or his PM. He may be liable for your costs of moving as well as other damages, including legal fees.

This oftentimes is a common scam: The owner goes into foreclosure for six months or so and continues to collect rent, knowing all the while the property is going back to the bank. Take six properties and multiply that by six months rent and you have three years of income without a dime invested. A tidy sum for a scumbag.

I would not pay another cent in rent until I talked with the attorney. I would also talk to the bank to see if there is something you could work out on the rent while the property is being processed through foreclosure. Maybe negotiate a new lease with the same term as your current one. Banks don’t like being property managers but it will defray some of their costs if you can cut a new deal with them.