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My landlord is in foreclosure! What do I do?
Kathleen Harward
Issue date: 2/4/08 Section: Opinion
You can contact the new owner and ask to enter into a new tenancy, but if you don't reach agreement, you must move out immediately or the new owner may start an eviction action against you. You are not entitled to any grace period after the sale date to move out. It is safest to assume that the new owner will not want you to stay.
Sometimes, the bank that made the loan becomes the new owner at the sale, and banks are not in the landlord business.
Until the sale date, you still owe rent to your landlord, unless you've received notice from the court that a "receiver" has been appointed to receive rents. After the sale, if the new owner wants to keep you on as a tenant, you would sign a new lease and pay rent to the new owner.
Before the sale date, you can ask your landlord to let you out of the lease, but the landlord may want to keep collecting rent as long as possible. If you stop paying rent before the sale date, the landlord has all the usual remedies against you -- to evict you, turn you over to collections and sue you for rent. Certainly, the landlord can report unpaid rent to the credit bureaus and blemish your credit rating.
If the sale date lands at a bad time, like smack in the middle of finals, you may decide to take a risk, give your landlord notice that you'll be moving out before the sale date, and stop paying rent at that time. You may even decide to take the risk of letting your security deposit cover the last month's rent based on the assumption that a landlord in money trouble may not return your security deposit.
Applying the security deposit to the last month's rent is not appropriate under normal circumstances, but it is a risk that may be reasonable depending on the circumstances. It would certainly not be appropriate if your security deposit is necessary to pay for damages you made to the property.
The Public Trustee's Office expects to see more and more foreclosures. It already gets multiple calls a day from tenants caught in the middle.
Sometimes, the bank that made the loan becomes the new owner at the sale, and banks are not in the landlord business.
Until the sale date, you still owe rent to your landlord, unless you've received notice from the court that a "receiver" has been appointed to receive rents. After the sale, if the new owner wants to keep you on as a tenant, you would sign a new lease and pay rent to the new owner.
Before the sale date, you can ask your landlord to let you out of the lease, but the landlord may want to keep collecting rent as long as possible. If you stop paying rent before the sale date, the landlord has all the usual remedies against you -- to evict you, turn you over to collections and sue you for rent. Certainly, the landlord can report unpaid rent to the credit bureaus and blemish your credit rating.
If the sale date lands at a bad time, like smack in the middle of finals, you may decide to take a risk, give your landlord notice that you'll be moving out before the sale date, and stop paying rent at that time. You may even decide to take the risk of letting your security deposit cover the last month's rent based on the assumption that a landlord in money trouble may not return your security deposit.
Applying the security deposit to the last month's rent is not appropriate under normal circumstances, but it is a risk that may be reasonable depending on the circumstances. It would certainly not be appropriate if your security deposit is necessary to pay for damages you made to the property.
The Public Trustee's Office expects to see more and more foreclosures. It already gets multiple calls a day from tenants caught in the middle.
Viewing Comments 1 - 1 of 1
Tabetha
posted 5/16/09 @ 6:57 PM MST
If you are in foreclosure and need to know what to do just say out loud now Jesus I believe and I receive you in my heart please help you can also go to this website for prayer leroyjenkins. (Continued…)
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