Can a landlord rent a house out if it is already in the foreclosure process?

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Can a landlord rent a house out if it is already in the foreclosure process?

Asked on October 21, 2012 under Real Estate Law, Kentucky

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If the landlord disclosed the foreclosure prior to the tenant(s) agreeing to rent the home, it is perfectly legal--while it may not be a good idea to rent a house in the foreclosure process, the law doesn't make people make good choices. (Note: the above applies if the house is in the foreclosure process but has not yet been foreclosed; once the foreclosure occurs, the landlord is no longer the landlord--he does not own the home--and cannot rent it out.)

If the landlord fails to disclose a foreclosure of which he is aware at the time he was seeking to rent the home, he has committed fraud--failed to dislose a material fact which he is under an obligation to disclose--and the tenants could resind (cancel and get money back) the lease and/or sue him for monetary compensation.


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