As a renter, it is your responsibility to pay your rent on time each month. Then, the landlord or property manager uses those payments to pay off utilities and the mortgage on the property. This chain of events keeps everyone happy. When you stop paying your rent, your landlord becomes unhappy and unable to pay their bills. When your landlord cannot afford (or simply neglects) to pay their bills, a major problem occurs.
If you’re renting and your landlord stops paying the mortgage, the property could go into foreclosure. In some states, renters are protected during this process, but in others, they aren’t. Learn more about what you can do as a renter if the property goes into foreclosure.
Know What Signs To Look For
If you’re unsure of your landlord’s current situation but think the house might be going into foreclosure, keep an eye out for legal notices. Foreclosures can be delivered via mail or posted on the property. If you notice any around, contact the sender for more information. Let them know that you’re a tenant on the property, then contact your landlord as well.
When talking to your landlord about the property being in foreclosure, ask a lot of questions. Be sure to be clear and concise when asking, as your landlord is probably very stressed about the situation or maybe even confused. They could try to lie and state that the foreclosure is a mistake or that they have cleared up the issue. Once you’ve gathered some information from your landlord, check with local courts or the company that issued the foreclosure to ensure that your information is accurate.
As a renter, you are entitled to the following rights when the property you’re renting goes into foreclosure:
- The right to know how long the foreclosure will take – this will be helpful as far as the timeline you have to find a new place to live.
- The right to the specific protections that keep you safe as a tenant in your state. Each state has different laws – find how you’re protected here.
In some cases, foreclosure alone does not justify eviction. If your state has rent control or “just cause eviction” requirements, you could be protected by a local housing authority, but you may need a lawyer to ensure the process goes smoothly.
If your utilities are shut off as a result of your landlord being unable to pay the mortgage…contact the utility company and your landlord right away. You could avoid the utility being turned off by paying for them on behalf of your landlord.
If your landlord sells the property as a result of a foreclosure…talk with the new owner. Ask to see the documents that clarify their ownership before you sign a new lease or start paying them rent. Scammers often scout out foreclosure signs and try to contact current tenants to falsely demand payment.
If your landlord is asking you to move out as a result of a foreclosure…negotiate with them. In some cases, you can negotiate a “cash for keys” agreement. Your landlord, the new one (or their bank) may give you some money to help with moving expenses.
If your landlord refuses to give your deposit back after a foreclosure…you may need to take legal action to get your deposit back.
No matter what your situation, knowing your rights is the first step on the road to justice. Stay tuned to Whose Your Landlord for more information on your rights as a renter.