If you just found out your landlord is in foreclosure, you probably must continue to pay your rent, or you risk a possible eviction.
On the flip side of the coin, if your tenants are not paying rent because you are in foreclosure, then you should demand rent be paid, or evict them if they don’t leave the home.
Foreclosures are moving slowly in Orlando, Daytona Beach, Ormond Beach, and Palm Coast. They are almost always taking longer than one year. A Palm Beach Post article:
Federal mortgage giant Fannie Mae more than doubled the amount of time Florida attorneys have to complete a foreclosure, acknowledging the reality of the state’s overwhelmed court system and problems with foreclosure paperwork.
Law firms now have 450 days (about 15 months), up from 185 (six months), to move a foreclosure from the first referral to an attorney to a foreclosure auction before fines can be levied.
Most residential leases, whether you are the landlord or the tenant, are for one year or less. So chances are the lease term will finish before the bank can finish the foreclosure in Florida and take the property back.
This is the important fact to remember: just because a person is in foreclosure does not mean they no longer own the home. The bank must finish the foreclosure process and complete a sale of the property to cut off ownership.
Until ownership is cutoff, or unless the lender exercises legal action to collect rents, the tenant must pay the landlord or risk eviction.
The clients call me to ask me what to do when the tenant stops paying rent. Or I find out they didn’t realize they could collect rent. Meanwhile the tenant has been living in the home for free for 12, 18, 24 months, or more. That isn’t fair either, is it? Why should a tenant receive a free ride?
Now there are other issues if you are going to collect rents or have a tenant in the home. For example, I hope you keep the home insured. Are the homeowners association dues being paid?
There are other issues as well. Issues to be discussed with an attorney during a consultation.