Is it legal for a landlord to charge rent if they are not paying their mortgage?
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Is it legal for a landlord to charge rent if they are not paying their mortgage?
My former landlord continued accepting rental payments from me and HUD (I get Section 8 rental assistance) while knowingly letting the property go into foreclosure. This isn’t the only property he did this with, either. Is this legal – to accept rent on a property the owner isn’t paying the mortgage on? Is this equity skimming? Can I sue him for the return of my rental payments when he stopped making the mortgage payments? Also, he did not return my deposit as stated in our lease. Is he or the foreclosure/mortgage company responsible for returning it to me?
Asked on October 19, 2011 under Real Estate Law, Arkansas
Answers:
M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
Even though there is a foreclosure situation, as long as your landlord remains the owner of record (i.e. on the title to the property) you must continue to pay your rent. If you don't you could be sued for eviction. As a lawful occupant of a property in foreclosure, you should be notified by the mortgage lender as to the sale/transfer date of the property. You will then be informed where to send your rental payments by the new owner. However, your landlord is responsible for the return of your security deposit, not the new owner.
Additionally, you should be aware that under the law, a tenant is given rights and protection if their rental unit is foreclosed upon. Accordingly, when a rental 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 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. Additionally, in cases where state law provides more protection than the federal law, the state law applies.
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