What to do if my landlord has defaulted on the mortgage and foreclosure has been initiated?

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What to do if my landlord has defaulted on the mortgage and foreclosure has been initiated?

The lease expired some time ago and we have continued month-to-month. The landlord still expects rent payments. I want to stay in the home as long as I can. I have read other QA here and am familiar with the Protecting Tenants at Foreclosure Act. But since the foreclosure isn’t complete (no sale of property yet) and I have no idea when that will happen, what are my rights now? It seems the 90-day notice provision doesn’t apply yet. I’m concerned now because I dont think the landlord will be able to refund my security deposit and I have told him to apply it toward the next month’s rent; he didn’t like that and is threatening legal action.

Asked on January 2, 2013 under Real Estate Law, Tennessee

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

You have no right to make the landlord apply your security deposit to your next month's rent, so if you fail to pay the rent, the landlord may indeed take legal action: e.g. evict you, sue you for the money, etc.

Until the home is actually foreclosed upon and sold at a foreclosure sale/auction, your landlord is still your landlord--you have to keep paying him rent. Since you are now a month-to-month tenant, either you or your landlord can terminate the tenancy on a month's notice--you may wish to look for a new, more stable situation, then provide notice and move out prior to the foreclosure.


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