Dozens of low-income tenants in two hotels in Vancouver's Downtown Eastside are facing an uncertain future, as their new homes might soon be sold out from under them, CBC News has learned.

The owner of the Palace Hotel and Wonder Rooms has run into serious financial problems and his buildings are facing foreclosure. The hotels are owned by George Wolsey, who has battled with the city for years over building code violations.

In September, Wolsey agreed to hand over operations of the hotels to the Community Builders Group, a local non-profit organization. But now the nonprofit group believes that the receiver handling the case wants to evict the tenants.

Jerry Covington and Molly Maclellan, who share Room #2, had spent four years living on the street before getting a clean, warm and affordable room last month.

"Ever other place just treats you like an animal," said Covington. "We finally got a place that treats you like a human."

Made livable

The group has tried to get the building up to code, cleaned up rooms that were once unlivable and then moved dozens of tenants in, unaware of the financial challenge Wolsey faces.

"We had no idea this was close to receivership," said Julie Roberts, of Community Builders Benevolence Group.

Hotel owner George Wolsey has a history of battles with City Hall over his buildings. (CBC) "The receiver is talking about selling the building empty and evicting all 71 tenants and having an empty building in two months. And that obviously causes a lot of anxiety for our tenants who have nowhere else to go."

Sue Ouellette used to live in a studio apartment in East Vancouver, but it was too expensive.

Ouellette found a room at The Palace a few weeks ago and said the possibility of being evicted is terrifying.

"Not everybody makes a lot of money," said Ouellette. "There's people who do the grunt work that don't make a lot of money. They have to have a place to live too."

She's scared the building will be bought and turned into condos.

"If they keep taking housing like this away, where is everybody going to go? They're going to have tent cities again?"

The fate of the tenants could be decided as early as a foreclosure hearing Nov. 3.