Unfortunately, it is as common for tenants in Fredrick, MD to be as affected by foreclosures almost as frequently as homeowners. There is nothing more overwhelming and stressful than coming home to find a notice on your door that reads “This property is being foreclosed on and you must vacate the property immediately”. If you are renting a property and the landlord’s property has been foreclosed on, there are rights you have as a tenant against being illegally evicted, personal harassment, and neglect of the property. Here are some answers to the questions you may have if you find out that the home you are renting has been foreclosed.
Do You Have to Be Notified?
The simple answer is yes. You have a right to be notified by your landlord that the rental you are or are considering renting is in foreclosure. If you are currently a tenant, you are entitled to a copy of the summons and complaint for foreclosure. The summons and complaint will tell you that your rights to stay in the rental unit may end when the foreclosure is complete. From the time you are served with a document that is known as a “Writ of Possession”, there is typically a minimum of 90 days allowed before you have to leave the rental unit.
A Writ of Possession is a written order from the court that gives the building owner or the landlord the right to take possession of the rental property. However; under a new Federal law known as the Protecting Tenants at Foreclosure, you may get to remain in the rental unit until the end of your current rental agreement. Although you aren’t required to pay any money toward a potential lawsuit or the landlord’s mortgage, you aren’t required to hire an attorney, but it may be beneficial. A judge in the case will decide how the Protecting Tenants at Foreclosure law applies to your case.
Should you Keep Paying Rent?
The landlord still owns the property and has the right to continue renting it until a completed foreclosure sale of the property. So, if you do stop paying the rent, the landlord may start eviction proceedings against you for non-payment of rent. The money should be put into a separate savings account if you have to stop paying the rent so you can save money to move. If the property gets sold, you will be required to pay rent to the new owner of the property or the bank that issued the foreclosure. Even if you don’t know where to send the rent money, or if you send it and it is returned, it still should be put into a separate savings account, because you can be evicted if the rent isn’t paid.
Do You Get to Remain in the Rental Unit?
In some situations, yes you can stay in the rental unit, unfortunately, it isn’t up to you. When a foreclosure occurs, what happens depends on the decisions made by the landlord, the bank, and/or the court. Unless you buy the property, as a tenant, you don’t have the ability to alter the outcome of a foreclosure. There are a variety of things that can happen once the foreclosure has been filed, including:
- The landlord paying the entire amount due and redeeming the building from the bank, which ends the foreclosure and they continue to be your landlord
- The landlord may sell the building in order to pay off the bank, which ends the foreclosure, but you will have a new landlord
- You may be asked to leave by the bank before the foreclosure sale in order for the potential buyer to get an empty building
- The bank buys the property at the foreclosure sale, which means the bank may choose to manage the property in order for the tenant to stay or the bank may choose to give some or all of the tenants a 90-day notice to vacate the property
- If the building is sold and the new owner chooses to live in the property, you have a right to receive a 90-day notice to vacate the property. The 90 days begins from the date you were served with a “Writ of Possession”
Can you End Your Lease?
If you have been notified of foreclosure and you want to leave before the end of your lease, it is important that you give your landlord a 30-day notice of ending the lease. The reason you must give a 30-day notice is that until the foreclosure sale is complete, your landlord can still hold you responsible for breaking the lease and may sue you for the rent remaining until the end of your rental agreement.
What About the Security Deposit?
Generally, you are entitled to get the security deposit back within 14 days of the time you vacate the property. Unfortunately, during a foreclosure process, the owner of the property may change, and the bank that has foreclosed on the property has the right to give tenants a notice to leave the property. So, it isn’t guaranteed that you will get the deposit back. One way to attempt to get the security deposit back is to ask the landlord to return your security deposit when you find out about the foreclosure. If the landlord does return the deposit before you move out, you should put the deposit in a separate savings account, so that if there is a new landlord and they allow you to remain in the rental, but you have to pay a security deposit, you’ll have the money. If your current landlord refuses to return the security deposit, you can write a letter to the court requesting an order for the landlord that is selling the property to put the deposit into a special account that can be transferred to the buyer after the foreclosure sale. Remember to send a copy of the letter to everyone involved in the foreclosure process.
Although you may not need to seek the advice of an attorney, it is recommended that you talk with an Fredrick attorney that has helped many landlords and tenant clients resolve their situation, especially if you are illegally evicted, such as being told to vacate the property before the 90 days is up. Under the Federal Protecting Tenants at Foreclosure Act, tenants are permitted to remain in their rental home for 90 days after the property has been foreclosed on. The only type of situation in which you wouldn’t be allowed to remain in the home for the full 90 days is if you are being evicted on legal grounds, such as not paying the rent or conducting illegal activities on the property.