What are my rights as a tenant during a foreclosure?
Jan 09, 2009 in
Financial and Loan Tips
robotdentist
Hi. I have a verbal month to month agreement with my landlord in New York State. She recently stopped paying the mortgage and the house is going to go into foreclosure. I got the paperwork from the attorney handling it back in November. My lanlord states that I have to continue to pay her the rent each month of $400. Is this true? I’ve heard from other sources that I can continue to live in the house with out paying my landlord until the bank gives me a 60 day notice to move.
Hi. I have a verbal month to month agreement with my landlord in New York State. She recently stopped paying the mortgage and the house is going to go into foreclosure. I got the paperwork from the attorney handling it back in November. My lanlord states that I have to continue to pay her the rent each month of $400. Is this true? I’ve heard from other sources that I can continue to live in the house with out paying my landlord until the bank gives me a 60 day notice to move.
Thanks for all your help in advance!
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11 comments
laughter_every_day on January 13, 2009 at 6:25 pm
You have an agreement. Now you want to know if you can get away with breaking your agreement. That makes you a crook. Good luck with that.
rage997_666 on January 16, 2009 at 10:45 pm
Your landlord can probably make life hell for you – throw you out, or have whomsoever now owns the house throw you out. After all, there’s no way in Hell you’re meant to be staying there for free, is there! Bargain to pay your landlord, say, $250 a month until it’s time to go…..you’re both getting a good deal
CLEMVIER on January 17, 2009 at 9:57 am
It might vary in different states but if it goes into forclosurer I believe you are correct. I also believe that you have a first option to buy it from the bank. I have a friend that got her house in PA that way.
douglas l on January 20, 2009 at 1:49 pm
No, a verbal agreement, while never a good idea, is still a legally binding obligation. Even though the property is in foreclosure the obligation is still extant until the deed changes hands. In the future you should always get everything in writing particularly in matters of money. In this case your landlord can still require you to honor your end of the agreement as long as you have possession of the domicile. And, if for no other reason, it’s just the right thing to do. Your landlord has enough problems going on.
Spot on January 22, 2009 at 1:18 pm
In New York….if you are not on a lease or public housing in NYC, then you have NO rights! Someone told you wrong. Sure, you can continue living in the house without paying rent…..BUT, the landlord will probably end up taking you to court and she will win. Best to be thinking really hard about moving…..fast!
cloothe on January 24, 2009 at 3:02 pm
You owe your rent. The fact that the mortgage was foreclosed has no immediate effect on you; it certainly does not give you a waiver on the rent.
If you have a month-to-month lease, either of you may cancel at any time. In most states, all that is necessary is one month’s notice. In other words, you could tell the owner (the new one, now) in February that you are not continuing hte lease after February 28, and you are moving out before the March 1 date for your next lease payment. It could well be that New York law requires that the landlord would need to give you 60 days’ notice to vacate. I don’t know enough about New York law to say yes or no about that, but it is certainly possible. However, be that as it may, it has no effect on your obligation to pay rent.
Good luck!!
cr500 on January 25, 2009 at 11:58 pm
Consider the following.
The landlord can pay the balance at anytime.
You can be kicked out if you don’t pay the landlord.
I say drink 2 beers then cut a deal with the landlord.
If she is hot, offer her a beer also.
rhsaunders on January 28, 2009 at 3:16 am
You and the landlord are each bound by the terms of the lease, even if the landlord changes. That means that rent will be payable to the new owner, as soon as that owner takes over title (but to the previous owner until that time), so long as you continue under the lease. Since the lease is month to month, the new owner can terminate the lease on 30 days (not 60) notice, so it is time to negotiate and find out what his intentions are.
njc_flhtc on January 30, 2009 at 2:11 pm
Until the property IS foreclosed, you still have a valid agreement with the landlord. Unless your lease specifically addresses default on the mortgage by the landlord (most don’t) and thereby sanctions you to stop paying rent – you owe the rent until the day the house is taken.
Most leases contain a “subordination clause” which advises the tenant that the lease is subordinate (has a lesser standing) to any mortgages against the property. If the lender takes the house back – they’ll want to sell it to someone – anyone – as quickly as possible to recover or lessen their loss. Lenders typically DO NOT want tenants in the property and all bets are off in terms of what the lease says – so they’ll ask you to clear out – pronto.
Remember, the landlord can pay the arrearage on the mortgage at any time prior to foreclosure and bring the loan current, in which case nothing changes for you – including the obligation to continue paying rent. If the worst DOES happen, and assuming you have the means to purchase the place – you might get a real bargain on it.
Bottom line: Don’t listen to those who tell you to stop paying rent. If you’re living there and using the property, you owe the rent. Talk to the landlord and reach some compromise if he is positively going into foreclosure so you can shop for another rental before the lender shows up and asks you to leave. Even in that case however, the lender will typically give you 30-60 days to vacate.
John on January 31, 2009 at 10:42 am
1. You have no rights specific to the foreclosure. Your rights as a tenant were put in place behind the mortgage.
2. Until the foreclosure is complete the property is still owned by your landlady. You still owe her the rent.
3. As you are on a month to month verbal contract your future rights to live there will not extend off into the future. The landlord has not broken a promise if she looses the property. Unlike the situation where you have a year lease but the landlord looses the property before the lease term completes. Even then the lease is legally junior to the mortgage so the tenant should consider the risk. Tenants never do so they feel they lost out.
4. You could stop paying here and she can file an eviction notice, obtain a judgment against you and otherwise get the public records to show you have failed to pay.
I am not saying she will or that she can afford the time or money to do so.
You will have to decide what you want to do. Being on a verbal month to month basis you have almost no rights as a tenant. In some states it is not legal to set up a verbal agreement.
The bank will take no action against you until they are the owner. If they sell the property at auction they will never have become the owner so you will never hear from them.
I would start looking for a better place to live. That way you can find something that works for you before you are forced to move. Note the foreclosure process might not force you to move ever though you likely will have a new landlord. They will expect a written contract if they know what they are doing.
She She on February 3, 2009 at 7:12 am
I think it goes something like this: You have the right to pay the rent or move out!..ss