Does a lease with option to buy or land contract survive foreclosure
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Does a lease with option to buy or land contract survive foreclosure
Does a lease with an option to buy or a land contract survive if the owner that
issued the lease/contract goes into foreclosure mortgage was in place before
lease/contract? Also, would the tenant in that situation be treated like any
other tenant under PTFA?
Asked on December 28, 2018 under Real Estate Law, Michigan
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
A lease with an option to buy does not survive the foreclosure of a pre-existing mortgage: the foreclosure cuts off all rights of the owner, including the right of the owner to lease or contract to sell (or both) the home. The tenant would be treated like any other tenant under PTFA, because during the term of the lease, he is leasing it and has a legal tenancy.
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