Law Office of Michael B. Mangano

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My Landlord Didn’t Pay His Mortgage, Do I Still Need to Pay My Rent?

So you have been faithfully paying rent to your landlord for years, and just a few days ago you find out that your landlord has not been faithfully paying his mortgage.  Now what happens? How is the foreclosure going to affect your rights as a tenant?

The good news is, your rights do not significantly change.  You are still the lawful tenant, even after the foreclosure auction.  Just because there is a new owner of the building does not mean that you have to immediately leave.  Sure, you might find that the new owner wants you to leave, the new owner may even try to persuade you into thinking that you have to leave.  If the new owner wants you to leave, he has to follow the same procedure as any other landlord would.

It is important to mention, you still have to continue to pay your rent.  After the foreclosure, you will have to determine who the new owner is and how you should be paying him.  This is important.  Most new owners, if they do not want you to remain on the property, will intentionally make an effort for you not pay them.  This will, in short, make it easier for them to evict you later on.  You should do your due diligence and try to locate the new owner and make payment to that person.  By doing so, you preserve your interest in the property.  Even if you cannot locate the appropriate person to pay you should be putting that monthly payment aside, just in case the new owner seeks payment later.

If you had a lease agreement with the previous landlord, this agreement terminates.  The lease agreement terminates, not the actual tenancy.  This is because a lease is automatically converted into a tenancy at will after a foreclosure.

In conclusion, your rights might not significantly change, but you have to be aware of the situation and understand some of the tactics that a new owner might use to better themselves.  If you feel that a new landlord is trying to take advantage of you, you should contact an attorney to help you understand your rights.

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