Duplex Foreclosure Doesn’t Mean Free Rent

said on October 24th, 2011 categorized under: Tenants

duplex rent checkI recently received an irate phone call from a Minneapolis duplex owner’s tenant, informing me he no longer had to pay rent, as the property was in foreclosure.

Like him, many tenants living in pre-foreclousre duplexes mistakenly believe they are no longer obligated to pay rent.

But this is not the case!

Minnesota law states the duplex owner, regardless of his or her status with her lender, retains all legal rights and priveledges with the duplex until title changes hands.

In a Minnesota duplex foreclosure, this happens at the end of the redemption period, which is six months after the date of the sheriff’s sale.

Typically, duplex owners who are at least three months behind on their mortgage payments receive a “Notice of Default” from the bank. At that time, a sheriff’s sale is scheduled; usually six weeks from that initial notification.

However, in today’s market, many lenders are reluctant to carry more foreclosed duplexes on their books, so they may push the sheriff’s sale date back one or more times.

During this time, duplex landlords, retain the right to collect rent, evict delinquent tenants and rent out vacant units.

It is important to note, however, that after the sheriff’s sale has occurred, duplex owners must disclose to prospective tenants the property’s foreclosure status.

If you’re behind on your duplex mortgage payments, things are bad enough. Don’t let your tenants make them worse.