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Has the house actually been sold at foreclosure auction?
If so, when was it sold?
Was the house so damaged as to be uninhabitable?
Ok, then the day the house sold, the old owner is no longer the owner and has zero legal right to collect any more rent.
And if the house was uninhabitable, which it sounds like it was, then from the point it was damaged, you would be entitled to a substantial reduction in rent if you stayed, or he would have had to put you up in a hotel at his expense until repairs were made so you could move back in.
So whatever date the house was sold is the last day you owe the old owner any rent.. If you have paid him rent after that, you can actually sue him for it back as well as for any out of pocket damages in small claims court due to him not taking action to repair the property so as to make it habitable.
The fact he didn't have a permit would be between him and the city, but wouldn't affect your lease contract.