I am a tenant in a house for rent, what happens if the house is foreclosed on?

October 26, 2009

I live in Maryland and rent a house. My lease is up at the end of this month, but the owner wants me to sign another year lease. I want to stay in the house, but he is putting the house up for sale in the next few weeks. (The reason being that he is in the construction business and his bank is closing his commercial credit line) The judicial process has alright started against him.

So I have a few questions-
1) If someone buys the house, will they have to honor my new lease?
2) If the bank forecloses on the property, will I still be able to live here until the process is complete?
3) Will the bank honor my lease?

Thanks in advance!

1) No they do not need to honor your lease but most new landlords will.
2) If you have a one year lease but the bank forecloses on you they will need to abide by the terms of your lease. I would NOT resign a one year lease if I was in your position. You would be better off to find a more stable place to live.
3) See #1 - Most landlords would but a bank is not a normal landlord so they may not.

3 Responses to “I am a tenant in a house for rent, what happens if the house is foreclosed on?”

  1. Stephen T Says:
    October 27th, 2009 at 2:46 am

    1) No they do not need to honor your lease but most new landlords will.
    2) If you have a one year lease but the bank forecloses on you they will need to abide by the terms of your lease. I would NOT resign a one year lease if I was in your position. You would be better off to find a more stable place to live.
    3) See #1 - Most landlords would but a bank is not a normal landlord so they may not.
    References :

  2. David Z Says:
    October 27th, 2009 at 3:31 am

    yes of course they have to honor lease. the lease is attached the real estate and sells with it. This basic real estate law. the buyer buys the lease also.

    the bank will have to honor lease also. better check with maryland attorney on this.
    References :

  3. godged Says:
    October 27th, 2009 at 3:51 am

    NO NO NO, the other posters are WRONG, the bank will not honor your lease. There has been legislation enacted that states the lender as the new owner has to give you 90 days to move, but the lender does NOT have to honor the lease. Once ownership changes hands, your lease is void except for the 90 day stipulation allowed by current law.

    And if someone besides the lender buys the house, they just have to serve you with eviction and in 30 days or so, you will have to be out.
    References :
    Oregon Realtor

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