Note: The DearEsq free 'ask a lawyer' site is offered as a free informational service to the public and is not intended as legal advice. Laws vary from state-to-state, and in addition every situation is unique, and relevant facts may not be known. The answer to the question posed below may not apply to in your state or to your situation. For legal advice in your state and your situation you should consult with an attorney in your state who is familiar with the rules and laws in your state.
“We have just found out that the property we rent is a reverse mortgage on the home. Is our lease still good or can we get out of the lease since they are breaking the law? We do not want to be a part of their scam.”
As it sounds like you are aware, a reverse mortgage is a type of loan where the lender makes payments to the borrower (instead of the other way around), and expects to get paid off, with interest, when the borrower dies or sells the property. And as you also are aware, one of the requirements for a reverse mortgage is that the borrower (or an appropriate related party) occupies the property.
Since you are renting the property, I presume that the borrower (owner) is not also occupying it, which would be an event which allows the lender to call in the loan, and be repaid in full. However, it’s not clear whether that in itself provides you with a legal basis to terminate your lease. The existence of the reverse mortgage doesn’t prevent the owner from renting out the property, it just means that if they do, they must repay the lender.
That having been said, it is understandable that you are uncomfortable in a situation where you presume your landlord is lying to (or at least withholding information from) their lender.
On a practical level, if you only have a short time left on your lease, the easiest solution may be to just wait it out and move at the end of the term. If that’s not practical, perhaps your landlord may be willing to agree to an early termination. For all you know, they may be as concerned about the situation as you are, and eager to take back possession of the property.
