Can You Prevent Your Landlord From Foreclosing Your Property?

For renters, the prospect of foreclosure can often seem far removed from daily life—while eviction is always a possibility if you stop paying rent, a landlord's arrangements with their mortgage lender (if any) are not usually within a renter's knowledge. But if your landlord is foreclosed upon while you're in the middle of your lease, you could find yourself on shaky ground when it comes to preserving the status quo. Read on to learn more about how foreclosure prevention programs can benefit both homeowners and landlords, as well as some of the steps you can take if you learn your landlord is the subject of foreclosure proceedings. 

Can You Prevent Your Landlord From Foreclosing Your Property?

Unless you're purchasing a property under a land contract—a situation in which you may have some legal claim to your equity in the property—as a renter, you likely have no legal standing to intervene in a foreclosure proceeding against your landlord. However, this doesn't mean you're completely without rights or recourse. All states provide protections to renters who are impacted by a landlord's foreclosure, requiring any subsequent purchaser of the property to honor the original lease or provide an extended notice period (such as six months or more) if the new purchaser wants to terminate the lease.

How Can Foreclosure Prevention Programs Help?

Many states have dedicated foreclosure prevention programs designed to help borrowers and banks work out their legal differences whenever a settlement seems possible. Because avoiding foreclosure has financial implications for far more than just the property owner and the bank, many of these programs are available at no charge to the property owner. When it comes to rental properties, this process can provide a win for all parties involved: the lender avoids the time, hassle, and expense of a foreclosure proceeding, the borrower landlord avoids having a judgment of foreclosure on their record, and the renter is able to remain in the property for the duration of their lease.

Like other foreclosure proceedings, a renter generally doesn't have legal standing to request (or participate in) a settlement conference. But if you learn that your landlord is facing foreclosure and aren't sure whether they have any plan to avoid it, it can be a good idea to seek out information on the foreclosure prevention programs your state provides and give this information to your landlord so that they can take advantage of the resources available to them.

If you face foreclosure, reach out to a business like We Save Homes.