Does a lease, on residential or commecial property, survive a foreclosure, or is terminated by a foreclosure? What are the rights of a tenant after a foreclosure? I'm in Massachusetts if that helps anyone who knows.
2007-08-06 10:36:23 · 5 answers · asked by contingentlaw 1 in Business & Finance ➔ Renting & Real Estate
In a foreclosure all parties to any interest in the real estate must receive notice including tenants. Once the issue is in front of the judge the judge takes away all rights and orders the special master or the trustee to sell the property. You will be considered a tenant holding over without permission if you stay on the property after the foreclosure and can be subject to an eviction suit and damages resulting from it. I would go and negotiate an agreement with the lender now subject to them acquiring the interest and subject to the borrowers's redemption rights.
Best of luck to you
2007-08-06 10:45:12 · answer #1 · answered by newmexicorealestateforms 6 · 2⤊ 0⤋
I am in MA too. No a lease does not survive a foreclosure. The only way it could would be to be recorded prior to the mortgage which I doubt. You have a cause of action against the person that was foreclosed upon, good luck with that. You might negotiate with the new owner, but if it is the lender they do not want you in the house. Having said all of this the foreclosure takes time, and after a foreclosure you still have to be evicted. The eviction process is started by providing a thrity notice to leave. After this you get served with a summons and complaint which takes a week and a half. If you show up to court and give a sob story and say how you are moving but you just need a month or two you can get what is called an agreement for judgment and you can get another month or two for agreeing to leave. If you don't leave you still get a 48 hour notice and then the sherrif comes and moves you out. The lender just wants possession and they do not want to deal with moving you out and storing your stuff. The clock does not strart until they give the thirty day notice. You can have 3-6 months rent free in the house even after the foreclosure.
2007-08-06 17:56:15 · answer #2 · answered by stephen t 5 · 1⤊ 0⤋
The legalities surrounding a valid lease with a foreclosure are daunting, to say the least. In reality, a foreclosure does not and CANNOT invalidate a lease. It is a legal and binding contract.
That being said, you have a valid contract with a person who can no longer honor said contract because that person no longer owns the premises involved. However, the contract is still valid.
There is no requirement that a lender accept an existing lease contract when they take ownership via foreclosure.
The result? You are left with a still valid lease which the new owner is not accepting, and to which the former owner is still bound legally.
Your options ? The new owner will certainly evict you if that is in the best interests of the new owner. You are then left with the ability to sue the former owner for breach of contract and any resulting damages, including costs of moving, and so on.
Chances of collecting from a former owner who is in mortgage default? Middling, at best.
Good luck !
2007-08-06 17:50:54 · answer #3 · answered by acermill 7 · 1⤊ 0⤋
It is still valid. The new owner buys the lease too and can not break it based on ownership, he can't raise the rent either. Your lease is good with the new owner as the old.
2007-08-06 17:43:56 · answer #4 · answered by Elsa D 6 · 0⤊ 1⤋
terminated!!! but you can negotiate with the new owner.
2007-08-06 17:39:09 · answer #5 · answered by Anonymous · 0⤊ 0⤋