What happens to the tenant when the owner of the house dies....?
...and the bank repossesses the house after the owner's death? How long before the tenant must move? My boyfriend's landlord has weeks, possibly months to live but the owner took out a reverse mortgage on the house. He doesn't have a relationship with his son so there are no plans to leave the house to the son. What should my boyfriend do to prepare for the owner's death (in terms of finding housing)? Does he have to vacate the property immediately or will the bank allow him to continue to pay rent?
- LandlordLv 78 years agoFavorite Answer
The son inherits the house if it is not willed to someone else. You would pay rent to the son until the foreclosure completes (takes about 2 years under the circumstances you desribe), and then the bank for 3 more months.
- Bostonian In MOLv 78 years ago
If the landlord dies, any lease remains in full force and effect until its original expiration debt. The tenant will pay the rent to the owner's estate which will manage the property, make the mortgage payments, etc. It's actually rare for a home to go into foreclosure because the landlord dies, assuming that the executor of the estate is on the ball.
If the property goes into foreclosure, any leases die with the foreclosure but any tenants have a minimum of 90 days to move once the new owner (the lender in most cases) gives them notice of the foreclosure. Many lenders will offer "cash for keys" to entice tenants to move early. That's optional if all parties agree and the agreement is in writing.
You mention a reverse mortgage. Does the landlord still live in the property? Normally a reverse mortgage requires that the owner occupy the home as his or her principal residence. If the owner moves out, the mortgage becomes due and payable in full, typically within six months.
At any rate, a reverse mortgage is not much different from a conventional one once it comes due. Either the property must be sold and the loan paid off from the proceeds, or the lender forecloses on the property. The impact to any tenant is the same. If the property is sold, the lease remains in full force until its original expiration date. If the property is foreclosed, the tenant must be given no less than 90 days to vacate.
- MRALv 48 years ago
To cut to the chase, it really depends on what kind of lease you have and your local laws. Regardless of what type of mortgage the landlord has, whoever assumes the ownership of the home has to abide by the lease following the local laws (e.g. rent control). And it is never immediate; at a minimum, there would be a 30 day notice. If your boyfriend is on a one-year lease, the new owner (e.g. bank, son, whoever), must abide by the lease unless they plan on moving into the home themselves. If your boyfriend is on a month-to-month, then again following local laws, he may have 30-90 days.
Having said that, if your boyfriend is renting the house and the owner has a reverse mortgage loan on it, if the lender finds out that the owner does not live there, the loan will become due immediately and the lender may begin to foreclose. One of the very few conditions of a reverse mortgage is that the owner must live in the home as their primary residence. So they may not wait until he dies in order to collect on the loan (and/or foreclose) if he has not followed his contract.Source(s): I specialize in reverse mortgages (CA)
- realtor.sailorLv 78 years ago
First, continue paying rent even if your landlord dies. If and when the home is foreclosed upon your boyfriend is protected by the Federal Tenant Protection act of 2009. After the bank acquires title to the home he will have up to 90 days to vacate. Although the bank may offer cash for keys.
realtor.sailorSource(s): I'm a Realtor
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- Casey YLv 78 years ago
He should be ready to get out of there. If this was a reverse mortgage, then that company gets the house afterward.
There will be a gap between the death and the bank gets the property, but I would be ready to move.
- 8 years ago
The bank, at least for the interim, will take ownership and he will pay rent to the bank.
- Anonymous3 years ago
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