Renting Home In Foreclosure?
I am renting a home from a landlord who is in foreclosure. The home is set to be sold at auction on May 7, 2013. Do I need to pay a prorated amount of rent for the month of May instead of the full amount since the owner is not legally entitled to the rent after the 7th? I want to avoid a situation where I have paid the owner full rent and have to pay the new owner additional rent for the month of May.
- LizBLv 77 years agoFavorite Answer
When a rented property is sold (or foreclosed on), then the previous owner is obligated to transfer and pro-rated rent to the new owner. This means that you'll pay the current owner as usual on may 1st, and it will be their responsibility to pass on the pro-rated rent AND any deposits you have paid to the new owner (the bank). If the home is still in the bank's possession when you move out, it will be the bank's responsibility to return any deposits you are owed. If someone buys the home from the bank before then, then the responsibility will get passed on to the new owner.
I'll warn you, though, banks are notoriously lousy landlords. They don't want to be your landlord, they don't want to have to keep up with all the minute details of being a landlord, and so you *really* need to be proactive about protecting yourself. So, make sure that you find out exactly where your rent payment should go once the home is owned by the bank, and try to get a receipt when you pay your rent (do not pay in cash!). Make sure you have proof of all deposits you have paid, and also get a receipt for May's rent from your current landlord. Basically, don't trust the bank to keep up with the paperwork, and don't wait for someone to inform you of what's going to happen next. If you're unsure, go out and obtain the answer for yourself.
- Anonymous7 years ago
You can pay your landlord rent for May and the new owner will not collect for May. It will still be legally paid. It is credited as rent for May. Make sure you have a copy of the canceled check as proof it was paid.
The new owner assumes landord responsibilities at the time of the foreclosure.
Make certain you have a record of your security deposit, as the landlord might not transfer it to the new owner. Legally the new owner is responsible for the security whether or not they obtained it from the previous owner.
There is a possibility the foreclosure will be adjourned (postponed), as this is very common in foreclosure proceedings,
- A HunchLv 77 years ago
the owner is the owner on May 1 = you need to pay the full rent on May 1.
- you do not know if the sale will be postponed or anything.
Your new landlord (the bank) is required to accept the current terms of the property when they took ownership. This means if you paid your full month rent, they can't ask for you to pay it again. Keep a copy of your receipts for your records to prove the rent was paid. If you pay with a check, having access to the cancelled check via online banking is proof of your paid rent. If you pay with cash, you need to use a money order and save the receipt.
Additionally, any money you paid for a security deposit, is the responsibility of the new owner to return to you when you move out.
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- coraannLv 77 years ago
Did you not pay a deposit up front when you first moved in? Could this be applied to the rent
for May? If not, you had better pay the present landlord and get a paid in full receipt for May.
Then the buyer can work it out with the seller/bank/mortgage holder on closing.Source(s): Knowledge.