What happens to your tenancy when a foreclosure has been filed against your landlord ?

If the landlord has not been paying the mortgage on the property you are renting, the mortgage company can file a lawsuit to have the property auctioned off to pay off the loan. This is called a foreclosure. The lender must name and serve a summons and complaint on everyone with an interest in the property because once the property is sold, the lender wants to eliminate everyone else’s interest in the property – including yours. Foreclosures can take years to finish, and sometimes the lender looses the case, so don’t panic.

A foreclosure case starts with serving summons on all interested parties. If someone came to your door and handed you court papers, or if they just left them at the door, then a foreclosure has been filed against the landlord. Everyone served will have 20 days to respond to the court. As a tenant you can choose not to respond, or you can file an "answer" stating that you are a bona fide tenant and attach a copy of your lease, so that you are on record as qualifying for the protections under the "Protecting Tenants Under Foreclosure Act."

You can monitor the progress of the case on the Clerk of Court's website. In Broward that is http://www.clerk-17th-flcourts.org/ClerkWebsite/welcome2.aspx. Choose "online Services" and "Civil" as type of case, and type in the landlord’s name as defendant. http://www.clerk-17th-flcourts.org/Clerkwebsite/BCCOC2/OdysseyPA/CaseSearch.aspx?SelectCourt=true&DisplayCitation=no&DisplayType=Civil to see the status. You can also try calling the Clerk at 954-831-5745 and tell them the case number which is on the upper right corner of the court papers.

Foreclosure timeline:

These are the steps in a foreclosure case so you can see how far along your foreclosure is:

  1. Complaint filed & summons issued. Everyone has 20 days to respond to the court

  2. Returns of service will be filed - indicating the party was served or not served.

  3. Publication: the lender can publish a notice in the newspaper against those parties not personally served.

  4. Affidavits filed: in preparation for a motion for summary judgment the lender will file affidavits of costs and amounts due and owing

  5. Motion for summary judgment

  6. Notice of hearing ( must be no sooner than 20 days after the motion was filed and no sooner than five days before the hearing)

  7. Hearing for Summary Judgment: this is a 5 minute hearing based on the fact that no one has contested the foreclosure. If the lender’s papers are in order the foreclosure will be granted and the Clerk of Court will set a “sale date" on which the property will be auctioned off on the internet. The sale date is generally 6-8 weeks after the judgment.

  8. Sale Date: if the sale was not cancelled and the sale went through, you will see the sale noted on the docket. Your landlord no longer owns the property.

  9. Certificate of title: ten days ( or longer ) after the sale the court will issue a deed to the highest bidder at the sale called a “certificate of title."

  10. If the buyer is not the lender, but a 3rd party who is going to move in themselves, they can apply to the court for a “writ of possession" to have the sheriff kick you out. If the lender takes title, it has to give you a 90 Day written notice to move, before they can apply for a writ of possession. The 90 days does not start until you get the notice.

If your lease started before the foreclosure was filed, the buyer has to let you live out your lease.

The foreclosure does not terminate your lease until the property has been auctioned off, so your lease is still enforceable, and you still have to pay the rent.

If you are renting a condominium there are a few other concerns. First, if the landlord has not been paying the condo dues the association can file their own foreclosure. These foreclosures will move much faster, and generally will finish in less than a year. The association, however, will usually want to continue renting to you after they have foreclosed your landlord.

The condo association also has the right to demand the rent directly from you, if the owner has not been paying the dues. In this case, the association has to give you a written demand, and they cannot make you pay them rent, that you have already paid the landlord. Unfortunately for you, the association will not be responsible for making any repairs. Once the association has demanded the rent from you, they can evict you if you don’t pay them. But if you have paid rent to the association, the landlord can no longer evict you for not paying that rent to him.

If you are renting in a building of more than four units, it is considered commercial instead of residential. In a commercial foreclosure, the lender will usually try to seize the rent first thing, either by a court order for you to pay them the rent directly, or by having the court appoint a “receiver" to take over management of the building from your landlord.

There is nothing that protects your security deposit in the event of a foreclosure.