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Do we have to pay rent during foreclosure proceedings?

Do we have to pay rent during foreclosure proceedings?

Q: How late do you have to be on a mortgage before foreclosure?

Typically, a lender may start foreclosure proceedings after a borrower is 90 days late on mortgage payments. However, the exact timeline can vary by state and lender policies. It’s crucial for landlords to communicate with their tenants about any potential foreclosure to avoid legal issues.

Q: Does foreclosure affect renting?

Yes, foreclosure can significantly affect renting. While tenants must continue to pay rent, they may face eviction once the property is foreclosed. It's essential for tenants to stay informed about their rights and the status of their lease during foreclosure proceedings.

Q: What happens if your landlord doesn't pay your mortgage?

If your landlord fails to pay their mortgage, it can lead to foreclosure. As a tenant, you are still required to pay rent according to your lease. If the property goes into foreclosure, you may have limited time to find new housing, but your lease remains in effect until the foreclosure is complete.

Q: Can you sue a landlord for not paying a mortgage?

You cannot directly sue a landlord for not paying their mortgage. However, if they fail to disclose foreclosure proceedings before signing the lease, you may have grounds to recover damages under certain state laws. It's advisable to consult with a legal professional for specific guidance.

Full question:

My wife and I were recently informed by our rental company (landlord) that the owner of the home we rent has not paid the mortgage in about a year and now the house is going to foreclose. We have until 30 days after foreclosure (march 20) to move, but the rental company insists we still must pay full rent even though the home will be foreclosed on. My question is do we have to pay rent for the next two months. We are both full-time students and we have very little income. We also have 4 children and we are unemployed. We have never missed or been late on payment and we have lived here for nearly three years. What are our rights?

Category: Real Property
Subcategory: Foreclosure
Date: 04/07/2025
State: Oregon

Answer:

Under state law, tenants are generally required to pay rent according to the lease terms, even if the property is in foreclosure. As long as your lease is valid, you must continue to pay rent for the duration of the lease. However, since September 2009, you can apply any security deposit or prepaid rent towards your monthly rent payments once you learn that your home is in foreclosure. You must notify your landlord in writing if you choose to do this.

Once the home is foreclosed, you may not get your security deposit or prepaid rent back from the former owner. It’s advisable to use this money for rent as soon as you are aware of the foreclosure situation.

Additionally, if the landlord fails to provide a secure place to live due to the foreclosure, you may want to discuss a lower rent amount with them. If they agree, ensure you get this in writing.

According to ORS 90.310, if a landlord does not disclose foreclosure circumstances before signing a lease, tenants may recover damages or twice the monthly rent if they move due to this nondisclosure.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

What happens if landlord defaults on mortgage?

If a landlord defaults on their mortgage, the lender may initiate foreclosure proceedings. This means the property could be sold at auction to recover the owed amount. Tenants are still obligated to pay rent during this process, as their lease remains valid unless terminated. However, tenants may have rights to recover damages if the landlord did not disclose the foreclosure situation before signing the lease.