Landlord Collecting Rents In Foreclosure
Foreclosure is a situation where a house owner has not met with the terms and conditions of the mortgage. They have missed payments and as a result the mortgage or lender has decided to seize the house. This is called foreclosure where a mortgage lender is telling the home owner that the loan account will be foreclosed and the house is going to be auctioned by the court.
The person who owns the house may have been renting it out. However, the foreclosure is going to affect the tenants also. They will need to vacate the premises. But the foreclosure is not a direct agreement between the tenant and the court. The actual agreement is between the landlord and the tenant.
The landlord needs to ask the tenant to vacate, and inform them about the impending foreclosure. The landlord can continue to collect rent from the tenant until the foreclosure has been completed. Once the house has been auctioned and it is officially sold, the landlord cannot collect the rent anymore. However, the sheriff will also see that the house is vacated by then.
It takes about 3 to 6 months from the date of foreclosure to the date of auction. In the mean time, the landlord can still collect the rents. Since the tenant is staying in the house, they need to pay the rent under any circumstances. The foreclosure, in no way, is directly connected to the tenant and the rent that they have been paying to the landlord.
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