What kind of rental protection do I have as a tenant if I think my landlord isn’t current on mortgage payments yet I’m paying rent to him each month?

I have reason to believe my single unit owner isn’t current on his mortgage payments. I have been an on-time rent payer to him. Am I protected by some tenant law where I can remain in the condo until the end of my lease if things like foreclosure, etc take place?

Asked on July 13, 2012 under Real Estate Law, New Jersey

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

As a tenant are still required to pay rent to your landlord until he is no longer the owner of record. This occurs when title passes to the buyer at a foreclosure sale. The fact is that your landlord's financial problems have no effect on your obligation to fulfill the terms of your lease.  So if you don't pay your rent you can be evicted and taken to small claims for the money you owe. Additionally, your credit report can be affected.

However, you should be aware under federal law, a lender who takes possession of a property or a new owner who buys the building at auction has to let a tenant stay for the longer of 90 days from the sale or the remainder of their old lease. The rules are a bit different if someone is buying the property to live in; in that case they can terminate a lease with a 90 day notice from the sale date.  Additionally, your landlord is still responsible for the return of your security deposit. 

Note: Stay on top of when the sale date is, after that you can stop paying your landlord. The bank should send you notice of this.


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