Advise regarding Michigan Foreclosure of rental property with active tenants

[Christian James Winey]

Hey guys!! I have a scenario that my friend is currently going through that I need advice/ opinions on. This is a long one so I will attempt to break it into a flow that makes sense.

Scenario:

My friend is 26 years old with 3 children ages 8, 4, and 2. They have been renting a SFH in Michigan for about 3 years now. During the duration of their time there the landlord has been terrible in terms of communication, repairs, and general attitude. For an example a tree fell on their house during a storm and the landlord originally said that it was their responsibility to take care of it. Then after 2 months he finally removed the tree from the roof. They originally signed a lease when they started but that has now converted into month to month. My friend has always been on time with the rent over the past 3 years. Unfortunately my friend pays cash. So there is no paper trail. About 6 months ago they started receiving Foreclosure notices in the mail addressed to landlord at the property. When asked about it he stated that he was taking care of it. The notices have kept coming. And all this time they have continued to pay rent. This next information I'm unsure of how my friend became aware of; but this last week apparently there was a meeting at the bank or in court in regards to the foreclosure. My friend reached out to the landlord to figure out what's going on and has heard nothing. What should they do?

My take: I have been telling this friend for years now that they should find a new place. This landlord has a terrible track record for basic things and that he shouldn’t be trusted to do the right thing now. I’ve told them that they need to keep a record of payment and not pay cash. At the very least take it to Walmart and have a money order generated to have a receipt and paper trail. Also, month to month lease can be bad because the landlord can just choose to end the lease. All that said to me it looks like the house is in the foreclosure process and the landlord is taking rent and not paying the mortgage. They are wondering if there is anything to protect them from this? To my knowledge there isn’t. My friend just got their tax return and has some cash to play with, so my recommendation has been to find a new place to move into. Rentals are hard to come by in that area but not completely impossible. My suggestion is that it is better to move on your own terms than to be forced out when the bank comes knocking, especially since there is no paper trail of payments made to the landlord. Is there anything I am missing in regards to Michigan law? Does anyone have any knowledge about this process that could help? I appreciate your time reading this and any comments suggestions you may have!