Let’s say you’ve found the perfect rental for you and your family: great location, great floor plan, great price and great neighbors. You and your family have been renting for a few months and you’ve heard your landlord has been offloading property; you become concerned that his or her financial situation isn’t on the up and up. Will they go into foreclosure? Will you be evicted? Here are some basic principles of tenant’s rights if a landlord goes into foreclosure.
If you discover your landlord has defaulted on the home you’re renting, or you get wind of a foreclosure, do not automatically assume you must vacate the property posthaste. There are laws designed to keep you in your home that have been signed by President Obama. The National Law Center on Homelessness & Poverty released a report on Wednesday, titled “Without Just Cause: A 50-State Review of the (Lack of) Rights of Tenants in Foreclosure.” (Read the report on the center’s Web site.)
If you have been foreclosed upon, what does tenant’s foreclosure rights mean, anyway? Thanks to the 2009 federal legislation, most tenants with leases will keep their leases, and month-to-month tenants will have at least 90 days to relocate. Tenants with leases have no legal recourse against their former landlords, because they are in the same position vis a vis the new owner as they were with the old: The lease survives and ends as it would had there been no foreclosure. Similarly, month-to-month tenants always know that they can be terminated with proper notice, and 90 days is longer than any state’s termination period. (http://www.nolo.com/legal-encyclopedia/article-30064.html).
In Florida, specifically, according to Klein Law Group, http://kleinfirm.com/florida-tenant-foreclosure-guide.html, As a tenant, there is practically no way to stop the foreclosure lawsuit and auction. There are limited tenant rights when foreclosure happens. If a tenant finds out early in the process, they can continue to stay on the property and pay rent for many months before they have to leave. They say, the most frequent question they hear from tenants is “If my landlord is in foreclosure, can I stop paying rent?” A tenant’s first thought is that if their landlord isn’t paying their mortgage, why should they pay rent? However, stopping rent payments can be a mistake. The landlord owns the property until the auction, and they have seen landlords evict a tenant who refuses to pay rent in order to re-rent to another tenant for the remaining months before the auction and to keep the first tenant’s security deposit. The good news is there are legal defenses that may allow you to stop paying rent, provided you are willing to move out of the property at some point.
There is no one-size-fits-all solution to each tenant. For some tenants, a landlord’s foreclosure is the perfect opportunity to get out early from a lease, for others, it’s a good opportunity to lower their rent payments. Sometimes tenants and their landlords can have a frank discussion and reach a new understanding about their rental situation. Sometimes, that’s not possible. If talking to your landlord doesn’t help, or you don’t want to talk to your landlord, we suggest a tenant consult with an attorney to fully understand their rights before attempting to stop or modify their rent payments.
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