What rights do I have as a landlord with properties going into foreclosure on slow/non-paying tenants?

UPDATED: Apr 5, 2012

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What rights do I have as a landlord with properties going into foreclosure on slow/non-paying tenants?

My father owns some rental property I am the property manager. The bank has stated the foreclosure process due to the fact that we have fallen behind on our loans. The bank has also demanded to the tenants that they must start paying the bank directly. Some of the tenants still owe me money from previous months. What legal recourse do I have do I still have the right to evict them since the bank is now stepping in and attempting to take over my leases?

Asked on April 5, 2012 under Real Estate Law, North Carolina


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

1) If the tenants have not paid rent, you may evict them for nonpayment--at least  until such time as either the foreclosure is completed (and you are no longer landlord) or the bank obtains some court order precluding you from evicting them.

2) You, not, the bank, should have the right to sue the tenants, if you choose, for unpaid rent--again, unless the bank should get a court order giving it your claims against them, as way to collect on what you owe the bank.

3) Going forward, your tenants should keep paying you--again, unless and until the bank takes ownership, or there is a court order (such as one appointing a rent receiver) directing that payment be made to someone else.

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