The house I am renting is going to be foreclosed

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The house I am renting is going to be foreclosed

I am renting a house from a family that
owns it and they are not paying the
mortgage I’ve been paying 850 a month
to them but they don’t pay the mortgage
what are my options

Asked on August 5, 2016 under Real Estate Law, North Carolina

Answers:

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

Answered 4 years ago | Contributor

 
 

Federal law requires that when a rental home goes into foreclosure, a tenant with a written lease can continue to occupy the home until the end of the lease period, or 90 days, whichever is longer. The exception to this 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. Tenants with a month-to-month lease, or no lease at all, have to be given at least 90 days notice to move. Further, in cases where state law provides more protection than the federal law, the state law applies.
Until the house is actually foreclosed on and the lender takes possesion and the landlord is no longer the owner, you are obligated to pay rent. The reason is that up until the very moment the foreclosure is completed, the landlord is still your landlord. If you do not pay the landlord simply because they are being foreclosed on, you are in breach of the lease. The landlord may sue you for the rent, take it out of your security deposit, and/or evict you.
Once the foreclosure happens, you no longer need to pay the landlord, since at that point, they'll have no legal right to the home. However, unless you work something out with the new owner, they will be able to evict you from the premises. You should be notified by the mortgage lender as to the sale/transfer date of the property and be informed where to send their rental payments by the new owner.


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