Wednesday, February 23, 2011

Who Should Florida Tenants Pay Rent to When the Home They Are Renting is sold at a Foreclosure Sale?

Recently, I was asked a question by a client, who rents a home, what are his rights as a tenant when the property he is renting is in foreclosure. I advised him that as long as he is a bona fide tenant under the Protecting Tenants at Foreclosure Act (PFTA), that PFTA permits him to continue his tenancy for the remainder of his lease or 90 days from the date he received notice of the foreclosure, whichever is greater. However, the PFTA doesn't answer one interesting question; who does the tenant pay the rent to once the property is sold at a foreclosure sale? The simple answer is the new owner, but the answer may not be so simple. Often times the landlord/property owner who lost the property will file an objection to the foreclosure sale or file a motion to set aside the foreclosure judgment for various reasons. Even though a certificate of title has been issued and seemingly ownership has changed there remains a cloud hanging over title to the property because of the looming objection or motion. In light of all of the foreclosure fraud, we have advised some clients, our advice varies depending on the facts of each case, to continue to pay the landlord until the objection or motion is heard by the Court. However, each case is different and the prudent thing to do may be to pay the rent into the Court registry. It's recommended that you contact a local real estate lawyer to review your particular circumstances. The foreclosure mess just won't end.