What are my rights/options if I just found out that my landlord has 14 days to pay the balance of the mortgage on the house?

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What are my rights/options if I just found out that my landlord has 14 days to pay the balance of the mortgage on the house?

We do not have any kind of written lease agreement. Also, can the bank seize my property that is in the house?

Asked on June 7, 2012 under Real Estate Law, Iowa

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

1) Until the house is actually foreclosed by the bank or your tenancy is otherwise terminated, the landlord is still your landlord, and you keep paying him. As stressful as the threat or uncertainty of foreclosure is, not until the foreclosure occurs does anything change.

Note that sometimes, when a mortgagor (the property owner) defaults on his mortgage, the mortgagee (the bank) has the right to have a "rent receiver" appointed before foreclosing--a person who will collect the rent for the bank instead of the property owner. If that happens, you will get a court order directing you to pay the receiver the rent you'd otherwise pay the landlord.

2) If the home is foreclosed upon, your tenancy is terminated. There are some laws that will give you at least 3 months (90 days), I believe, before having to move out, and possibly more, depending on the circumstances. Given that first the foreclosure must happen; then the lender must bring an eviction action if you don't leave; and then you should be able to get some additional time, it could be many months yet before you have to leave.

3) If you do not have a written lease, you are a month to month tenant, and your landlord--or anyone he should sell the home to before it is foreclosed--has the right to terminate your tenancy on 30 days notice, and if you did not then move, could evict you.

4) The bank has no right to keep your property--you (presumably) never signed anything giving them a right to it, and the mere fact that someone owns or forecloses upon real estate does not give them the right to take other person's property which is in or on that real estate.

The above said, if there is a foreclosure, you may have people (e.g. bank representatives; court officers; realtors) entering your own for various legal reasons, but which people are not under your control; also, if the bank believes that some of the property actually belongs to the landlord (e.g. it's his furniture), they may try to seize it (you'd get it back upon showing it's yours). For both reasons, it's probably not a bad idea to remove any senstive papers you don't need ready access to, any jewelery or otherwise easily stolen valuables, and any furniture or art that's particularly valuable (e.g. antique or sentimental pieces) and put them in storage or a safe deposit box, as applicable.


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