If I just signed a lease with a real estate company but found out that the bank now owns the property, can I get out of the lease?

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If I just signed a lease with a real estate company but found out that the bank now owns the property, can I get out of the lease?

I wanted to know what I can do because I just signed the lease to my apartment and now the bank is calling me telling me that I am to pay them my rent because the owner has not been paying on his loan he had for the property and he is not making an effort to pay it. I want to know if I could get out of the lease and move my family elsewhere so I know my family is safe so if the bank does foreclose I know my family has a home. I am a mother and I am pregnant and I can’t be worrying everyday if I will have a home to come home to with this going on.

Asked on April 9, 2012 under Real Estate Law, Maryland

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If the bank does foreclose, that will terminate the lease, since foreclosure cuts off the owner's right to grant or provide possession of the premises.

However, if  the property has not been foreclosed on, but you are being asked to pay the rent either directly to the bank or to a rent receiver, pursuant to a court order, your lease is still in effect--the property owner is still the owner and still can grant possession, even if someone else has a claim on the revenue or proceeds from the lease. You will still be leasing, and will still be paying rent--you'll just be paying to whomever the court has designated.

If there is no court order requiring you to pay to the bank or rent receiver, then keep paying to your landlord or its property manager (whomever you were paying)--it takes a court order to change whom you pay.


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