If I’m a tenant of a dwelling being foreclosed on, should I continue paying rent?

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If I’m a tenant of a dwelling being foreclosed on, should I continue paying rent?

Asked on December 28, 2012 under Real Estate Law, New York

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Yes, you should, the fact is that as long as your landlord remains the legal owner, you must continue paying rent. A foreclosure does not relieve you of this obligation; if you fail to pay you could be sued for the money.

You just need to be careful to find out when title to the property passes at auction or otherwise. Some former landlords have continued to collect rent even after they no longer owned the property. Fortunately, as a tenant in foreclosured property, you should be notified by the mortgage lender as to the transfer date of the property (i.e. the date on which the landlord is no longer the legal owner). You will then be instructed as where to send your rental payments.

Note: You should be aware that when a rental goes into foreclosure, tenants who have a written lease can continue to occupy the home until the longer of the end of the lease period or 90 days. The exception to this would be if the new owner intends to move in and occupy the home as their primary residence. In such case, a 90 day notice to move would apply.


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