Not long ago I spoke with a Minneapolis duplex owner who was upset I’d spoken with his tenants in order to reach him.
The duplex owner was facing foreclosure, and feared I’d mentioned this to them.
While I knew his property was distressed, and I was, in fact, trying to reach him to see if I could help him find a solution, I would never tell a tenant anything one of my sellers or prospective sellers would not want shared. I always assume mortgage delinquency is confidential.
Here’s the irony. The tenants already knew.
In Minnesota, banks deliver a copy of the notice of default to the tenants. It includes the date of the sheriff’s sale, as well as other important information about the foreclosure process.
It does not, however, absolve the tenants from paying rent, abiding by the terms of their lease, nor reduce or eliminate their rights.
Until the end of the redemption period, (which is six months after the sheriff’s sale in Minnesota), duplex and other investment property owners also retain all of their rights as a landlord.
If you’re a duplex owner facing foreclosure, however, please remember that a second loan or Home Equity Line of Credit (HELOC), will survive the loss of the property, and the lender will have up to six years to pursue you for the deficiency.
And that’s the good news.
The not so good news is the IRS may want to hear from you too.
There are solutions, including short sales and loan modifications. Please contact me. I’d be happy to help find a solution.