Renting Out A Property In Foreclosure
Renting out a home or a second property can be a profitable endeavor despite the risks associated with being a landlord. Property owners who make the decision to rent out their homes may do so when things are going well for them financially, or even when they are in the midst of financial troubles and about to face foreclosure. Most renters will actively avoid renting a property that is already in foreclosure because of the risk that they could get thrown out of the home at any moment. For those renters who are already in existing rental agreements, there are certain renters’ rights that the landlord has to keep in mind.
First, the landlord should know that the tenant will be informed of the pending foreclosure by being served with the court papers. This notice to the tenant is to allow her to file her own answer to the court providing the details of their rental agreement or lease with the landlord, and to inform the court when the lease would terminate. This notice also provides the tenant with an opportunity to decide whether or not to stay despite the existence of a lease. If the tenant wants to leave before the end of her lease, the tenant may do so without penalty by notifying the landlord that she is leaving due to the fact that the home is in foreclosure.
The tenant should continue to pay rent until the homeowner loses possession of the property. Some tenants may feel cheated if they are unaware of the foreclosure and continue to pay rent only to discover they are about to be evicted. A property owner who is early on in the foreclosure process may choose to tell the tenant that the home is in foreclosure in order to prepare them for the move. However, this may also make the tenant decide not to pay rent because the owner is not paying their mortgage. If you are in this situation, you should discuss how to proceed with an experienced attorney. After the property has been legally transferred to the mortgage lender or another buyer, the property owner should stop accepting rental payments associated with the home.
Even though the tenant may leave the property after being served with the court papers indicating the property is in foreclosure, this may not be the only remedy available to the tenant. If she could have remained on the property under the terms of the rental agreement, then she may sue the landlord for any security deposit, moving costs, and other costs associated with having to move out early from the property. This possibility may be increased in cases where the tenant rented the property closer to the end of the foreclosure period and received no notice that the property was in foreclosure.
Contact An Experienced Foreclosure Defense Attorney
If you are facing foreclosure on your primary or rental property, it is important to seek an experienced foreclosure defense attorney to determine what rights and options you have. Contact the North Miami foreclosure attorneys at Charlip Law Group, L.C. for a consultation on your case.