Are You Renting a Property in Foreclosure?
Foreclosure is the legal process of a lender enforcing the mortgage against the property of a homeowner or landlord. If you are a tenant, you probably make routine payments to the landlord for the property you are renting. It is then the landlord’s responsibility to pay the mortgage servicers and lender for any loans on the property. If a landlord does not make required payments, the lender may have the right to file a foreclosure action claiming the landlord failed to follow a provision on the note and mortgage.
In Ohio, a lender has to file a foreclosure action with the courts. If you receive a foreclosure action from a lender, a foreclosure defense lawyer at Doucet & Associates Co., L.P.A. may be able to help you reply. If you do not reply in 30 days a foreclosure lawsuit will begin and you could face default judgement and automatically lose your home to the lender. A tenant renting a property in foreclosure can track the lawsuit through their local Clerk of Courts. If you are in Franklin County, please click here to access public records through the Clerk of Courts.
A tenant should continue to pay rent while the rental property is in a foreclosure lawsuit or pay the rent into escrow with the court. The landlord technically still owns the property until confirmation for a sale at the end of the foreclosure lawsuit, and a foreclosure lawsuit can take a few years. If you, as a tenant, stop making required payments stated in your lease, your landlord can file an eviction action against you for not paying as long as they own the property. A landlord could also sue for damages and hold the tenant eligible for any remaining money due on the lease if the tenant tries to break the lease early.
Until confirmation of a sale, the landlord still owns the property and has a duty to keep up the property, make any repairs, and pay utility bills not paid by the tenant. After confirmation of the sale, the landlord does not own the property and therefore cannot collect rent from tenants. When this happens, the tenant has other rights under the Protecting Tenants in Foreclosure federal statue.
The new owners of the property are allowed to evict the tenants who are renting from the previous owner. In limited circumstances, the new owners may have to honor the remaining terms of the lease if the tenant has a history of paying rent on time or into escrow. If you need help with foreclosure, contact Doucet & Associates Co., L.P.A. at (614)944-5219 for help.