Blog

What to do in Michigan if Your Landlord Goes into Foreclosure?

Posted by Missy Caulk on December 18, 2009 at 4:25am
What should you do if you live in Michigan and are in a lease with a landlord who goes into foreclosure?The ScenarioIn good faith you have signed a lease. One day you come home from work or classes and see a notice of foreclosure on the door.First, don't panic. According to Michigan law the mortgage company must post this on your door at least 15 days before advertising in the papers a notice of foreclosure.After the 6 weeks of being posted publicly, the home must go to a sheriffs sale. Michigan is a redemption state, this means that the homeowner has 6 months from the date of the sheriffs sale to "redeem" the property. Basically this means the homeowner must pay all fees and back mortgage payments.The lease you have is valid until the redemption period ends.Should you pay your rent?That is a tough call, as the landlord has not been paying the mortgage but using your money. Technically the landlord still owns the property. Your lease is with them. One suggestion on the Michigan Tenant Organization suggests is to keep the money as the landlord could still bring and eviction case for non-payment of rent.Security DepositYes you are still entitled to getting your security deposit back.In Ann Arbor, I have seen this several times. In good faith you signed a lease, paid the rent and come home to find a "notice of foreclosure" on your door.If you are working with a Licensed Realtor, it is a good idea to have them prove they are current on the mortgage obligations at the time you sign a lease.Many homeowners in the Ann Arbor Area have not been able to sell their homes, therefore, they choose to rent. Many times the rent is not enough to cover their mortgage payment and they get behind.If they miss 3 months payments the mortgage company or bank will begin the process of foreclosure.Your lease is valid until the 6 month redemption period ends.If you need help in Washtenaw County contact Michigan Tenant Counseling Program at 734-761-8599
Tags: Michigan, foreclosure, landlords, tenants
E-mail me when people leave their comments –
Follow

You need to be a member of Short Sale Superstars to add comments!

Join Short Sale Superstars

Comments

  • Steele V. Propp December 21, 2009 at 5:23am
    In Minnesota we have similar statutes including a six month redemption on most properties. I am surprised that a tenant's association would in essense suggest that a tenant violate their lease agreement. The landlord does not "technically" own the property during redemption. He/she owns it, period. And it would be relatively easy to file a small claims court hearing against a tenant that fails to meet the lease agreement (in this example rent). And win (IMHO).

    As a Realtor I would never suggest breaking a contract. While it may not seem fair that the tenant pays and the landlord doesn't, the legal reality is that one has nothing to do with the other.

    Very suprised a non-profit would even suggest this. Unless they are saying, "if you do stop paying keep the money available as the landlord may come after you." Then they could "technically" say that they didn't suggest it :>)
This reply was deleted.

Latest Blog Posts

Most Popular Blog Posts

Blog Topics by Tags

Monthly Archives

********************************** like buttons ************************