If my rental property is in foreclosure, doI still have to pay rent?
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If my rental property is in foreclosure, doI still have to pay rent?
Asked on November 21, 2011 under Real Estate Law, Illinois
Answers:
M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
As long as your landlord remains the owner of record (that is still on the title to the property), you must continue paying rent to them. A foreclosure does not relieve you of this obligation. If you fail to pay you could be sued for the money.
Just be careful to find out when title to the property passes at auction, etc. Some former landlords have tried to continue and collect rent even after they no longer own the property. Fortunately, as a lawful occupant of a rental property in foreclosure, you should be notified by the mortgage lender as to the transfer date of the property (i.e. the date on which the landlord is no longer the legal owner). You will then be informed where to send your rental payments.
You should be aware that federal law gives some rights and protection to a tenant in this situation. When a home goes into foreclosure, tenants who have a written lease can continue to occupy the home until the end of the lease period, or 90 days, whichever time is longer. The only exception would be if the new owner intends to move in and occupy the home as their primary residence. In that case, a 90 day notice to move would apply.
Note: Your landlord is responsible for the return of your security deposit, not the new owner.
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