Can a new landlord raise my rent 14% even if my old lease says it can only be raised 3%?

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Can a new landlord raise my rent 14% even if my old lease says it can only be raised 3%?

I am a renter, and our previous landlord defaulted on his loan, so the bank foreclosed the property. The management company that is currently running our apartment building while it is in receivership is saying that the lease we signed under the original owner is null and void. Therefore, the portion stating that the rent increase on the next lease cannot increase three percent is not valid. Our lease is up in a couple months and they want to raise it 14%. Is this legal?

Asked on April 27, 2012 under Real Estate Law, Ohio

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Unfortunately, unlike a sale of building, where the buyer takes the property subject to all existing leases, a foreclosure does terminate any leases. Therefore, the new owner of the building (such as the bank) and its managing agent are not bound by the terms of the old lease, since the old lease has been terminated.


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