Many of us have heard of landlords collecting rent while their property
was in foreclosure. Usually, it’s in a news report or perhaps you’ve heard it
in person from a buyer or through a friend or acquaintance. I was surprised to hear an attorney take the
landlord’s side recently.
While it seems distasteful in the least and dishonest at the
worst, it is not illegal. Because the
landlord is still the owner through the end of the redemption period (here, in
Michigan), they have the right to collect all rents due – at least until
redemption expires and they are no longer the legitimate owner. Hmm.
I suppose that if they had been upfront with their
tenant/lessee, that’s one thing. Maybe
the tenant would even get an extra month or two of accommodations for free out of the
deal. I recently had the experience of talking to a
tenant that had been given a ‘great’ rental price for a two bedroom condo, just
a couple of months before the redemption period expired. He was in a pinch, on a budget, and this was
practically a gift from heaven. Until he
found out that the condo had been foreclosed upon and he was asked to vacate.
So that landlord smelled the coffee, rented it cheaply and
made a few bucks on it before losing it.
Again, not illegal, but it sure seems like a large misrepresentation to
me. Certainly it is a major
omission.
What do you think? Do landlords have the duty to disclose a
pending foreclosure to tenants or is it optional?
graphic courtesy of hyena reality/freedigitalphotos.net
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