If my landlord has defaulted on their mortgage, how can I stay in my home?

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If my landlord has defaulted on their mortgage, how can I stay in my home?

The landlord has defaulted and the property is going into foreclosure. Is there any way that I can simply take over his monthly mtg. payments or work out some kind of agreement with the mortgage company?

Asked on February 11, 2011 under Real Estate Law, Colorado

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Federal law gives some rights and protection to a tenant in the event that their rental unit is foreclosed upon. The “Protecting Tenants at Foreclosure Act” requires that 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 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. Those tenants with a month-to-month lease, or no lease at all, have to be given at least 90 days notice to move. Additionally, in cases where state law provides more protection than the federal law, state law applies.

You should be aware however, even after a foreclosure action is filed, as long as your landlord remains the owner of record, you must still pay rent to them.  Just be careful to find out just when title to the property passes at auction or otherwise. Former landlords have been known to try and continue to collect rent even after they no longer own the property. As a lawful occupant of a property in foreclosure, a tenant should be notified by the mortgage lender as to the sale/transfer date of the property and where to send their rental payments.

As for taking over the mortgage payments, this won'tt be allowed.  If you are in a position to purchase the property you can submit a bid at the auction.


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