Is your landlord in foreclosure?
Law You Can Use
Q: What happens if the property I’m renting is in foreclosure?
A: You probably make monthly rent payments to your landlord while your landlord makes mortgage payments to a lender. If your landlord stops making payments, the lender may foreclose on your landlord, which also will affect you. In Ohio, the lender must file a foreclosure complaint before legally taking a house or apartment away from the landlord (owner). Your landlord still owns the property until a court grants a foreclosure judgment and approves a sheriff’s sale.
Q: How will I know if a foreclosure has been filed against my landlord?
A: Generally, the lender (“plaintiff”) will name you as a tenant in the foreclosure complaint, but may only list you as “Jane or John Doe” or “unknown tenant at [your address].” You are unlikely to get a copy of the foreclosure judgment, but keep any notification you receive so you can find out how the case is progressing or get legal advice, if necessary.
Q: How can I find out about the status of the foreclosure case?
A: Check with your local clerk of courts for your county’s Court of Common Pleas. Many clerks have case information online (www.occaohio.com/countylist.aspx?qname=All). You may need to provide your landlord’s name to get information about the foreclosure, which is a civil lawsuit.
Q: Can I stop paying rent if a foreclosure lawsuit is filed against my landlord?
A: No. Your landlord still owns the property until there is a judgment and sale, and if you stop paying your rent, your landlord could file an eviction action in court, even during a foreclosure action.
Q: Can I break my lease if a foreclosure lawsuit is filed against my landlord?
A: Generally, a foreclosure filing doesn’t allow you to break your lease unless your lease agreement says otherwise. If you do so, your landlord could sue you for money damages. If you decide to move, you may want to negotiate with your landlord to terminate your lease early. If you reach an agreement, make sure it’s in writing and signed by your landlord, yourself and anyone else on the lease.
Q: Must my landlord maintain the property while it goes through foreclosure?
A: Yes. Until the court approves the sale, your landlord must still fulfill all obligations, such as making repairs, just as you must continue to pay rent.
Q: Can my landlord still collect rent after the court issues a foreclosure judgment and approves the property sale?
A: No. Once a “confirmation of sale” has been filed with the court, it cuts off all the owner/landlord’s rights, including the right to collect rent, but you should continue to set aside rent payment so you can pay the new owner. Whoever purchased the property at the sheriff’s sale will become your new landlord because the lease survives the foreclosure sale. The new owner should tell you where to make your rental payment, and the amount should not change. Also, the new owner must make any repairs that the lease or Ohio law would have required the old owner to make.
Q: Can I stay in my apartment once the foreclosure process is completed?
A: Yes, for at least 90 days. Under the federal Protecting Tenants at Foreclosure Act (PTFA), which applies to anyone who bought a property on or after May 20, 2009, as the result of a foreclosure, the new owner generally must keep you as a tenant. Usually, the new owner is the lender (plaintiff), who buys the property back from the landlord at the sheriff’s sale, so the lending company may become your new landlord.
Q: Can the new owner force me to move out?
A: Possibly, but you should receive at least 90 days’ notice before the new owner can make you leave. If you are a “bona fide tenant” with a “bona fide lease,” then you have the right to stay in your home until your current lease ends. If, however, the new owner intends to live on the property, you must receive at least 90 days’ advance notice to move out. The new owner can evict you if you do not leave after being properly notified. (Note: You must meet certain criteria to be a “bona fide” tenant with a “bona fide” lease. Consult an attorney if you are unsure about your tenancy status.)
Q: Can the court evict me through the foreclosure action?
A: No. If you are a “bona fide tenant” with a “bona fide lease agreement,” then the new owner must give you a 90-day eviction notice. If you do not move within 90 days, the new owner must: 1) serve you with a three-day Notice to Leave Premises and 2) file an eviction action. Under the PTFA, you may have the right to stay through the end of your lease.
Q: Where can I get more information or legal help?
A: Go to www.ohiolegal services.org/programs or call 866-529-6446 to locate the legal aid program in your area. You must be financially eligible to receive services, including advice.
This column was provided by the Ohio State Bar Association (OSBA) and prepared by attorney Joe Maskovyak, of the Ohio Poverty Law Center in Columbus. Articles appearing in this column are intended to provide broad, general information about the law. Before applying this information to a specific legal problem, the OSBA urges readers to seek advice from an attorney.
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