Going through foreclosure can be a complicated process. If a property going through foreclosure is a rental property being foreclosed on, it can be even more complex.
Like any foreclosure, a foreclosure on a rental property impacts the owner. What may be easy to forget is that foreclosure on a rental property can also impact renters.
If you or the property you rent is facing foreclosure, it’s important that you understand your rights and responsibilities. An experienced foreclosure attorney can help walk you through your options to avoid foreclosure or eviction during foreclosure on a rental property.
Contact Denbeaux Law today to learn more about your rights in foreclosure and how we may be able to help you.
Rental Property Foreclosure For Renters
If a rental property owner is in default and not making monthly payments, the bank will take ownership of the property through foreclosure. When a lender takes ownership of a rental, the tenants are the ones who could be impacted or evicted.
The rights of tenants in foreclosure are protected under New Jersey law. Renters typically have the right to remain in the property until the end of their lease or for a minimum of 90 days if on a month-to-month lease.
As a tenant living in a property going through foreclosure, it’s important that you’re aware of your rights to avoid being unlawfully evicted or taken advantage of. Consulting a foreclosure attorney can help you understand your rights as a renter and how they apply to your specific situation.
Rental Property Foreclosure For Owners
During the foreclosure process, rental property owners are still responsible for all property management responsibilities, including maintenance. If property owners aren’t keeping up with property management during the foreclosure process, they could face additional legal action from their tenants.
Rental income from renters should continue to be collected by the owner throughout the foreclosure process. It’s important that this money is managed appropriately and paid towards mortgage payments, even if it’s not enough to cover the entire mortgage.
Loss of a rental property through foreclosure may impact an owner’s income and investment portfolio. Any type of foreclosure, including foreclosure on a rental property, can hurt the owner’s credit and impact their ability to invest in real estate in the future.
What Happens If a Property Is Sold In Foreclosure?
If a property is sold in foreclosure, it doesn’t mean much for the previous owner other than that the property has gone through foreclosure. The owner will need to settle any outstanding debts with the lender, but that’s all they can do.
A property being sold in foreclosure can impact the renters. The new owner will inherit the existing leases, meaning you won’t be kicked out of your rental property just because it’s been purchased.
In the future, the new owner may choose to retain current tenants or seek to terminate leases, but they can’t do that without your lease ending or proper warning.
Contact a Foreclosure Attorney
Foreclosure can be a confusing and difficult process, especially if a rental property is facing foreclosure and other people’s homes are at risk.
A foreclosure attorney can help explain how the foreclosure process works and what options you have to avoid foreclosure and/or keep your home.
Learn more about the process of foreclosure on rental properties and what that means for you. Contact Joshua Denbeaux today.
