If the property I rent is going into foreclosure, do I still need to pay?
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If the property I rent is going into foreclosure, do I still need to pay?
I am a tenant in a multi-unit home. My neighbor found a foreclosure letter on his door and shortly after I received an e-mail saying that the home is going into foreclosure. I rent through a property management company. They said I should get out within the next 60 days or so. My lease was not to be up for another 3 months. Am I to continue paying rent to the property management company?
Asked on February 22, 2012 under Real Estate Law, Michigan
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
1) Until the home is actually foreclosed on, the current owner is still your landlord and you should still pay rent as you have been. Only once the foreclosure occurs and the owner's ownership is cut off, will you not have to pay rent. Once the foreclosure is finalized, then you would not pay (unless you work out a new arrangement with the new owner, such as the bank).
2) I believe that laws passed in 2008 or 2009, during the financial crises and real estate bubble collapse, give a residental renter in a foreclosed home at least 90 days (if he or she wants it) after the foreclosure to vacate; and under some circumstances, the renter can get more time, through to the end of his or her lease--though in your case, that seems to be the same as getting 90 days.
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