Q&: Is our rental lease still valid in foreclosure?

There are some basics to consider when waiting for your security deposit. (shutterstock)

QUESTION: I am a renter in a house that is going into foreclosure. Does our lease still hold true even though the bank might take over at any moment? Should we still be paying our landlord although he doesn’t make payments on the house anymore?


A: Yes and yes. This is a very common question, and we have dealt with it here before. But because it is asked so much, the answer bears repeating. Through the end of 2012, the federal Protecting Tenants at Foreclosure law provides that tenants with a valid lease can complete the terms of their leases with the foreclosing lenders.

You still have to pay the rent to your current landlord as long as he or she owns the property. Otherwise, you can be evicted; it doesn’t matter that your landlord is not paying the mortgage. Once the bank forecloses, do not pay the landlord, because the bank now owns the property. Pay the rent to the foreclosing lender.

Q: I completed a deed in lieu of foreclosure with the bank on an investment property I owned about two years ago. To date the condo is still owned by the bank. I read that the bank has 20 years after the condo’s sale to come after me for the deficiency amount and that it can garnish my wages. Is this true?


A: Not entirely. In any dispute, there is a set amount of time that the parties can sue each other. After that, the party being sued can get the lawsuit dismissed because it was filed too late. This is known as the statute of limitations and varies by jurisdiction.

If your lender does sue you for the mortgage deficiency, you may be able to settle the dispute for pennies on the dollar.

Q: My father left his home to his brother for a life estate when he passed. After my uncle dies, the property is supposed to go to my sister and me. Our uncle is not paying the taxes. We are afraid that the property will be lost to the tax collector. Is there something we can do to get our uncle out of the property and save it?

A: There is nothing you can do to get your uncle out of the house while he is alive. Because he took the property through a life estate, he owns the property as long as he lives. But you and your sister also have a vested interest in the property as “remaindermen” and therefore have rights as well. You could pay the taxes on the property yourself and then sue your uncle for reimbursement.



Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. He is the chairperson of the Real Estate Section of the Broward County Bar Association and is an adjunct professor for the Nova Southeastern University Paralegal Studies program. Send him questions online at http://sunsent.nl/mR20t7 or follow him on Twitter @GarySingerLaw.

The information and materials in this column are provided for general informational purposes only and are not intended to be legal advice. No attorney-client relationship is formed. Nothing in this column is intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction.


©2011 the Sun Sentinel (Fort Lauderdale, Fla.)
Visit the Sun Sentinel (Fort Lauderdale, Fla.) at www.sun-sentinel.com
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