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Foreclosure: Tenant & Landlord Rights

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Foreclosure: Tenant & Landlord Rights


Written and Verified by Ralph A. Ferro, Jr., Esq.

Foreclosures occur in houses that a tenant rents.   However, tenants and landlord’s have rights which protect each of them.   There are instances when the landlord has filed for a voluntary Chapter 7 Bankruptcy.

I receive many calls from tenants as well as landlords who own/rent a residential property related to the foreclosure process.       Below is a brief explanation of the affects to tenants and landlords with regard to rental payments and foreclosure evictions.

It is important to keep in mind that many landlords have made the choice to allow their rental property to go into foreclosure.   This usually happens when the landlord files Chapter 7 Bankruptcy.    One of the reasons might be that the outstanding mortgage(s) are greater than the value of the property.   Also, the rents do no cover the monthly expenses.   The owner of the property is falling deeper and deeper into debt.

Payment of Rent

Tenants must continue to pay rent to their landlord.   If a receiver is appointed or ownership passes, then you should stop paying the landlord and pay the new entity.     Tenants should keep receipts of all money that is paid to their landlord not only to avoid eviction but also to provide to the new owner of the property.

If tenants do not pay rent, a landlord can evict a tenant.   However, the landlord must go through the Court in the normal court process.


Pending foreclosure action alone is not grounds for eviction to remove a bona fide tenant.  Tenants have rights whether there is written lease with the landlord or not.

Tenants who want to stay in the home that is in foreclosure can only be removed through the Court process.

However, since the foreclosure process may take some time, it is important for tenants to continue to pay rent.   Landlords can evict tenants even if the house is in the foreclosure process.

If you believe that the home you are renting is in foreclosure, you can locate sale notices in the County Sheriff’s websites.  In this way, you can always see when the sheriff’s sale is to take place.  Your landlord might not inform you if the property is in foreclosure.

However, foreclosure does not indicate that you are automatically going to be evicted.   The key is to continue to pay your rent.

Chapter 7 Bankruptcy

Many times, if a landlord decides to file Chapter 7 Bankruptcy, the rental property may go into foreclosure.

Call me today, if you have any questions related to the foreclosure process.   I am here to protect your rights.    If you are a landlord and your property is under water, I provide a free bankruptcy consultation.   Chapter 7 Bankruptcy may be a good option for your to get out of debt.