What to do if the house we rent is about to be foreclosed on?

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What to do if the house we rent is about to be foreclosed on?

We didn’t know but landlord did and still rented it to us. The papers were served out our home. Can we get our deposit and monthly rent we paid already back?

Asked on January 2, 2013 under Real Estate Law, North Carolina

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

If the landlord knew of the foreclosure but did not disclose that to you, the landlord likely committed fraud (a material misrepresentation--or important lie--made to induce you to enter into the transaction). Fraud can provide a basis to rescind a contract, like a  lease. You would not be able to get back rent paid for time you have been in residence (living there), since if you did, you would have been "unjustly enriched"--you would have gotten to live rent free. So you'll have to pay for the time until you leave, but should have grounds to terminate the lease without penalty, and should receive back the deposit unless you damaged the premises or leave owing rent. That said, this is a general answer, based on general principals. Every case is different, and the specific facts are critical; you are advised to consult with a landlord-tenant attorney before doing anything.


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