What are out rights as tenants in a foreclosure situation?
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What are out rights as tenants in a foreclosure situation?
My husband and I have been renting a home for 4 years. Our landlord passed away earlier this year and the house was left to her son. We have continued to pay rent but last Friday a woman from the mortgage company came to the house and spoke to my 12 year old daughter and told her the landlord was not paying. They were unaware that the landlord had even passed. I am assuming the son has not paid for months. What are our rights as tenants? How long are we able to stay in the home once foreclosure proceedings start? The son is requesting cash payments now and from what I understand we are still liable for the rent. Are we able to negotiate for a lesser rent or is there any way we can legally stop paying?
Asked on December 27, 2012 under Real Estate Law, Florida
Answers:
M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
Federal law gives rights and protections to a tenant in such a situation. Accordingly, when a home goes into foreclosure, tenants who have a written lease can continue to occupy the premises until the end of their lease or 90 days, whichever is longer. The only exception would be if the new owner intends to move into the home as their primary residence. In that case, a 90 day notice to move would apply. Tenants with a month-to-month lease, or no lease at all, have to be given at least 90 days notice to move.
However, even if a foreclosure action has already been filed, as long as the landlord remains the owner of record (that is still on the title to the property), a tenant must continue paying rent to them. In some jurisdictions, a tenant may be able to pay their rent to the local clerk of the court, who will in turn deposit the money into a special account. Therefore, a tenant must be careful to find out just when title to the property passes at auction, etc. Former landlords have been known to try and continue to collect rent even after they no longer own the property. As a lawful occupant of a property in foreclosure, a tenant should be notified by the mortgage holder as to the transfer date of the property. After this time, the landlord will no longer be the legal owner and the tenant should be informed where to send their rental payments by the new owner.
As to the return of the security deposit, when a property is foreclosed on there may not be much that a tenant can do. As a general rule, a tenant’s only legal remedy is to sue the landlord in small claims court (although even if successfull in winning a judgment, actually getting the money they are owed may be difficult).
At this point, you can contact an attorney who handles landlord-tenant cases for more information.
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