I suspect my landlord is in foreclosure, what are my rights as tenant?

It happens to many people. You and your landlord get along really well even though they may be living off site. Then one day a letter arrives. You know the type. It’s a letter of the legal kind and addressed to your landlord. Did they miss a payment? Are they in financial trouble even though you pay your rent on time? If you suspect that your landlord may be experiencing financial difficulties, the golden rule is to rather act fast than be unpleasantly surprized.

Whatever you suspect, you need to keep on paying your rent as per normal and make sure that you have receipts or some proof of your payments. Make sure that you keep your side of the rental agreement absolutely in tact. This will come in handy if you would like to stay on with a new owner. Depending on your relationship with your landlord and your agreements with regards to forwarding notices and letters, be kind and consider your landlord’s difficulties when forwarding any legal communication. If your landlord is suddenly surprized by the foreclosure, you may be the one without a home quicker than you expect. It is in your best interest to keep your side of things clean.

It may even be worth it to make 100% sure that your landlord is experiencing financial difficulties. We tend to think that real estate is without fail a good investment but it is not always and your landlord may be in financial difficulties without you realising. You can however do a public record search in your jurisdiction on your property address. This will include deeds as well as mortgage documents. This may be your deciding factor in what to do next.

Your state may have a judicial foreclosure process or a non-judicial foreclosure process. This means in laymen’s terms that you will either have 90 days after a judicial foreclosure or less than 30 days to move out. You will have to move quickly as it takes time to give your landlord notice and find another place to stay. If you have animals or small children moving with you, this may delay the process of finding a place to rent. Keep an eye out for a different place from the moment you suspect that something might be off.

Speak with a lawyer if possible. Communication with your landlord should be done in writing and a lawyer may be a great asset. Your lawyer will possibly also know a little bit about real estate and will be able to guide you in more ways than you would expect. Lastly, you may be having trouble getting a deposit back and your previous deposit normally plays a big role in your down payment for your next residence. You should be the first one to speak with a lawyer even before the foreclosure becomes a reality if possible.

Contact a real estate agent. Especially if your time is limited due to long hours at work or you have small children, you will find it tedious to drive around looking for another residence. A local real estate agent might even completely replace the need for a lawyer if you trust them with the gravity of the situation. They will know more about the legalities and they will also be able to fine tune your search sooner.

Make sure that you keep an eye on the date for the foreclosure. You may have to make life altering decisions and you will have to make these decisions sooner rather than too late. Remember, it is not just about moving into a new place. You will have to pay a deposit which most of us must save for. You will have to also physically leave yourself enough time to pack up the old house, and take photos of the new house before you actually move in. This will cover you at a later date should there be a dispute with the new owner. Make sure to hold a current newspaper in some of the shots to prove when the photos were taken. In between work and family, you still have to unpack everything and organize the kitchen etc. Moving is one of the top three stressful event that can happen to a person and the process is tedious at best. Try to leave yourself enough time to pack your life up in sections with an inventory rather than a mess of kitchen utensils and clothes mixed.

Remember that new owners more often than not try to resell as quickly as possible. It is easier to sell with no tenant and you may be getting the boot anyway after the foreclosure. There may not be enough time to speak with the new owner so don’t have your heart set on staying. Make the best of the situation and deal with it effectively and soon.