Landlord Not Paying Mortgage? (Here's What You Can Do)
When you pay your landlord rent every month you probably don’t think about where that money goes. You may assume your landlord owns the home and the rent is just income. Maybe you think that your rent is what pays the mortgage. Either way it surely must come as a shock when you find out that your landlord has stopped paying the mortgage on the property where you pay rent.
When your landlord stops paying the mortgage on the home you rent you should seek more information. If the home is entering foreclosure you should seek a tenant advocate or some other professional advice to find out the next steps you should take for protection. Do not stop paying rent. Be sure to continue following the rules. Check your lease and local laws so you know your rights as a tenant.
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Why A Landlord Would Not Pay Mortgage
There are a variety of reasons your landlord may have stopped paying the mortgage on your rental. There may have been a health emergency that has left the bills and payments neglected. Unexpected travel may also result in a pile of unpaid bills.
There is also the chance that your landlord has found him or herself in unexpected financial troubles. If this is the case, your landlord may begin to face foreclosure. When your landlord is unable to pay his or her mortgage and faces foreclosure there are several things you should know.
Check State Laws
You should look up laws that are specific in your state in regards to foreclosure. First check to see what your rights are as a tenant in the situation. Investigate and see if your state has any organizations you can reach out to in order to assist in these matters. Often local fair housing authorities are a good place to start.
Do You Have To Pay Rent?
When you discover your landlord is no longer paying his or her mortgage you may be confused and offended. After all, if you pay rent then you likely assume that money goes from your landlord’s hands to the bank (unless the house is already owned).
Unfortunately, this is not always the case. Landlords are human. This means they also can be affected by a number of financial difficulties. Landlords may use your rent check for other expenses. This may have you thinking maybe you should stop paying rent all together. That would be a mistake.
Lease Is Still Active
There may be a lot of financial drama happening behind the scenes between your landlord and the bank. This, however, does not affect you or the lease you signed with your landlord. Not yet anyway. As long as the house is still owned by your landlord the lease is active.
Even if your landlord is facing foreclosure it is critical to abide by the rules of the lease. Your landlord still has the right to evict you while he or she owns the home.
Landlord Does Not “Owe You”
It might seem crazy, but your landlord is not under any obligation to you to pay the mortgage. Even if the mortgage payment is less than your monthly rent it is important to remember the two are not directly connected.
If your landlord never informs you of a potential foreclosure and eviction, you may be entitled to damages in the future.mAs far as the mortgage payments and your landlord’s obligations to you – that is your landlord’s decision to make.
Do Not Let Your Credit Suffer
If you stop paying rent when you find out your landlord is going through foreclosure your landlord can take you to court. In addition to eviction, your landlord can request all the past-due rent from you. This small claims proceeding can damage your credit in a big way.
What To Do If Landlord Gets Foreclosed
If your landlord stops paying his mortgage it is only a matter of time until the foreclosure proceedings begin. It only takes a few months of missed payments before most banks begin to get the ball rolling on a foreclosure.
A foreclosure can leave the tenant as an innocent victim. The faster you act and the more you understand the better chance you have of a reasonable outcome.
Understand The Timeline
As soon as you discover your landlord is not paying the mortgage on the home you rent you should dig deeper. Do your best to learn how far along the proceedings are. Often you may have to rely on your landlord to give you this information. He is not legally obligated to do so.
Banks are also often not obligated to give you this information. However, you can do research on how quickly these proceedings move in your state. This may give you a good idea as far as how much time you have before the bank takes ownership of the dwelling you rent.
Seek Counsel
As soon as you get wind of your rental going into foreclosure you should reach out to an expert in the field. Seek out a tenant advocate. Often fair housing authorities can assist you with resources and individuals who specialize in foreclosure matters.
Tip: These people may also come in handy down the road if you are being forced out of your dwelling.
If The Property Changes Owners
If your landlord loses his house the home will likely change owners. Before you completely panic and assume you will be kicked to the curb, remember that having a tenant is often desirable. When a property quickly changes hands the home is often an investment. An investment property that also comes with a rent-paying tenant is often a bonus. You should, however, practice caution and know the possibilities.
Check Your Lease
In most circumstances, a tenant will be able to stay in the apartment through the remainder of the lease period. Sometimes, however, a lease will mention that in the case of a sale the lease is null and void. If this is the case, you may be asked to vacate the apartment in the length of time as required by law. If you have any confusion on your lease you should seek clarification as soon as possible.
Consult An Attorney
If your landlord is not paying the mortgage and you find yourself in a helpless or concerned position you may want legal counsel. Reach out to an attorney who specializes in foreclosure proceedings. This attorney may be able to guide you in the direction of next steps.
If you believe that your landlord may owe you damages (moving expenses, application expenses, etc.) an attorney can help guide you in this as well.
Closing Arguments
When you find out your landlord is not paying the mortgage on your home you might get nervous. Yes, it is true that your landlord may soon enter foreclosure. This, however, is not a certain fate.
Do your best to gather more information and seek additional advice when needed. You should continue to follow your lease and pay your rent throughout this period. Be sure to examine your lease so you know your rights, especially if the property changes hands.
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Related Questions
What Do I Do If My Landlord Stops Cashing My Rent Check?
If your landlord has stopped cashing your rent check you should contact your landlord and your bank. Contact your landlord to ensure the payments have been received. You should send your landlord an official communication via e-mail or certified letter in order to confirm he is aware that you have sent several pending rent checks. This will give your landlord a chance to respond with any concern or reasonable explanation.You should also contact your bank to find out how long your check is valid for. Usually a check is considered valid or “live,” for six months. After six months most banks will no longer cash checks. This is not a rule, as some banks cash checks that are up to a year old.
What Should I Do With My Landlord’s Mail?
In most cases, your landlord should not receive mail at your residence. If you share a mailbox you should have an understanding in writing in regards to how the mail is sorted. You may also suggest separate mailboxes for you and the landlord.If your landlord does not live in the same property you can request he has his address changed. Just because you are renting from your landlord does not mean you are responsible for his mail. It is, however, the kind thing to do to inform your landlord when he or she receives mail in your unit. If the problem persists you may request he or she submit a change of address form.
Can My Landlord Sell The Apartment I live In During My Lease?
Your landlord has the right to sell the apartment you live in while you are renting it. This practice is fairly common. If you suspect, or know for a fact, that your landlord is planning to sell your apartment you should check your lease.
Related Guide
Tom Gaffey is an expert writer who currently resides in Washington D.C. Tom has a passion for real estate and home improvement writing, as well as travel and lifestyle writing. He lived the last twelve years in Hawaii where he worked closely with luxury resorts and event planners, mastering his knowledge of aesthetics and luxury products. This is where he found his passion for home improvement and a keen interest in DIY projects. Currently, Tom resides in Washington D.C, and also working on his debut fiction novel.
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