foreclosure notice

What do you do if you are tenant and your landlord is facing a foreclosure on the property in which you reside? It’s easy to feel like an innocent victim in this situation. After all, you didn’t do anything wrong. You paid your rent on time. We’re all aware of homes for sale or condos for sale, but you decided to be a renter. It isn’t your fault that your landlord got behind on his bills. Unfair though it is, his imminent foreclosure has the potential to shake up your life. If this is happening to you, there are some important things you need to know.

You won’t be left out on the street

Foreclosure is simply a legal process for the transfer of property. Before the foreclosure, your landlord owns your building. After the foreclosure the bank owns it. That makes the bank your new landlord. Most jurisdictions require foreclosing entities to notify any tenants of the building and provide contact information for a new landlord or building manager. The same landlord/tenant laws restrict capricious evictions.

Your building might be auctioned

If the property is worth more than the mortgage then you’ll remain in the relatively safe hands of the bank. If the property is worth more than the mortgage, as is usually the case, then a court will direct the bank to sell the house at auction. Sometimes the bank will be the highest bidder at auction. If you have enough cash stowed away you may want to consider investing in some real estate.  Plus your new landlord will be you!

Always pay your rent

Repossession is a precarious time for a rental property. To protect your rights as a tenant always pay your rent on time – especially during foreclosure. If you miss a payment, the bank or new landlord can use it as an excuse to initiate an eviction. Until you take the temperature of the new owner of your building, make sure you mind your Ps and Qs.

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This is filed under Foreclosures.

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