Our landlord is being foreclosed on.
January 29, 2011 7:29 AM Subscribe
Our landlord is being foreclosed on; do we need to be doing anything at this point to maximize our chances of (a) not having to leave before our lease is up and (b) getting our deposit back?
I know there have been other questions along this line in the past, but not in the last couple of years, and I know there have been some changes in the law since then.
We received a piece of mail at our house addressed to our landlord (the owner) that indicates her lender has sent her a notice of intent to foreclose. Nothing has been filed in court yet (at least, nothing turns up in a search of judicial filings in the state), but I assume that's just a matter of time. (The letter we got at the house was from the state, so I presume the lender has filed the notice of intent with someone.)
As some background, this house is the owner's childhood home, which she became owner of when her mother passed away a few years ago. (When we found that out, it made us feel better about living here, as we figured she'd (a) be invested in keeping the house in good shape and (b) any mortgage she had on the home would be minimal. The first assumption is probably still valid but the second one....well, I guess that was a bad assumption.) The owner also has a management company taking care of everything related to our rental -- we remit our rent to the management company, we paid our deposit to the management company, the management company even recently sent us the tax forms for the interest we've earned on our security deposit. I only know the owner's name because the neighbors have mentioned it to me (she grew up here, remember), and from this recent piece of mail.
Our (written) lease is up at the end of July and I guess if we have to move then, we have to move (though we'd hoped to stay here a few years until we were ready to buy). But we don't want to move before then -- for one thing, the rental inventory is pretty lean around here right now. Also, if we end up deciding to go ahead and buy this year, we're going to need that time to get our financial ducks in order, get mortgage preapproval, etc.
So my question is, between now and the end of July, is there anything we can or should be doing to maximize our chances of staying here through our lease term and of getting our security deposit back?
(I am less concerned about the deposit than about getting kicked out of the house, since I am pretty sure the management company is holding it, and I know it's being held in an interest-bearing account because we got that tax form. But is there any way the owner could get her hands on it? Or any way our deposit can be somehow applied to the amount in default?)
In case it's relevant, we live in Maryland. I am a lawyer, but I'm not licensed here and I don't know anything about property law. Also, we like this house but we're not interested in buying it.
I know there have been other questions along this line in the past, but not in the last couple of years, and I know there have been some changes in the law since then.
We received a piece of mail at our house addressed to our landlord (the owner) that indicates her lender has sent her a notice of intent to foreclose. Nothing has been filed in court yet (at least, nothing turns up in a search of judicial filings in the state), but I assume that's just a matter of time. (The letter we got at the house was from the state, so I presume the lender has filed the notice of intent with someone.)
As some background, this house is the owner's childhood home, which she became owner of when her mother passed away a few years ago. (When we found that out, it made us feel better about living here, as we figured she'd (a) be invested in keeping the house in good shape and (b) any mortgage she had on the home would be minimal. The first assumption is probably still valid but the second one....well, I guess that was a bad assumption.) The owner also has a management company taking care of everything related to our rental -- we remit our rent to the management company, we paid our deposit to the management company, the management company even recently sent us the tax forms for the interest we've earned on our security deposit. I only know the owner's name because the neighbors have mentioned it to me (she grew up here, remember), and from this recent piece of mail.
Our (written) lease is up at the end of July and I guess if we have to move then, we have to move (though we'd hoped to stay here a few years until we were ready to buy). But we don't want to move before then -- for one thing, the rental inventory is pretty lean around here right now. Also, if we end up deciding to go ahead and buy this year, we're going to need that time to get our financial ducks in order, get mortgage preapproval, etc.
So my question is, between now and the end of July, is there anything we can or should be doing to maximize our chances of staying here through our lease term and of getting our security deposit back?
(I am less concerned about the deposit than about getting kicked out of the house, since I am pretty sure the management company is holding it, and I know it's being held in an interest-bearing account because we got that tax form. But is there any way the owner could get her hands on it? Or any way our deposit can be somehow applied to the amount in default?)
In case it's relevant, we live in Maryland. I am a lawyer, but I'm not licensed here and I don't know anything about property law. Also, we like this house but we're not interested in buying it.
I agree, having the management company probably means your security deposit is safe.
Are you sure the foreclosure is on your property, or some other place the landlord owns?
And I agree with southern_sky, I remember that being part of the law as well. So if the foreclosure hasn't even been filed yet, I doubt the timing would work out that you'd have to move before your lease is up.
posted by gjc at 8:06 AM on January 29, 2011
Are you sure the foreclosure is on your property, or some other place the landlord owns?
And I agree with southern_sky, I remember that being part of the law as well. So if the foreclosure hasn't even been filed yet, I doubt the timing would work out that you'd have to move before your lease is up.
posted by gjc at 8:06 AM on January 29, 2011
This happened to me in Michigan. New owner (a bank) called one day an explained it, asked if we'd be staying the rest of the lease (yes) and asked us to call when we left.
The property management company gave us the deposit back.
So in my experience, you're fine.
posted by ish__ at 7:28 PM on January 29, 2011
The property management company gave us the deposit back.
So in my experience, you're fine.
posted by ish__ at 7:28 PM on January 29, 2011
The federal law protects you, but more importantly, the timeline for foreclosure runs well past your July lease expiration. The case can't even be filed for another 45 days (since the notice was sent), and then you have hearings and redemption periods and so forth to wait out before the actual summary judgement, which is when the lender (or auction buyer) takes control of the property and becomes your landlord, at which time they can legally file for eviction -- a court process with a timeline all its own.
I'd keep close tabs on the case (perhaps even attend any hearings, just to be apprised, or file an appearance, which means you will get all notices in case you wouldn't normally as a resident of the property). I would expect to move out and be ready to do so in July, unless the landlord has come up with a solution for the bank by then. One thing that could come sooner would be an agreed-upon short sale, so make sure your landlord knows you want to hear if he's pursuing one.
posted by dhartung at 1:57 PM on January 30, 2011
I'd keep close tabs on the case (perhaps even attend any hearings, just to be apprised, or file an appearance, which means you will get all notices in case you wouldn't normally as a resident of the property). I would expect to move out and be ready to do so in July, unless the landlord has come up with a solution for the bank by then. One thing that could come sooner would be an agreed-upon short sale, so make sure your landlord knows you want to hear if he's pursuing one.
posted by dhartung at 1:57 PM on January 30, 2011
This thread is closed to new comments.
The security deposit issue will be dependent on Maryland law, with which I'm not familiar.
IAAL, but IANYL. TINLA.
posted by southern_sky at 7:46 AM on January 29, 2011