Tenants and Foreclosure – FAQ
Tenants impacted by foreclosure: Frequently Asked Questions
What is a foreclosure?
When an owner falls behind in mortgage payments, foreclosure is the court process by which a bank forces the sale of a building used as security in order to pay off the owner’s debt.
Who owns the building while it is in court?
Just because a building is in foreclosure does NOT mean that the building has been foreclosed on or will be foreclosed on. Until the court approves a sale and there is a confirmation of sale, your landlord still owns the building. In most cases, the bank acquires the property and becomes the owner.
What are some common signs that my building might be in foreclosure?
- Maintenance suddenly stops
- Utility shutoff notices
- Banks sending notices to the landlord
- Realtors hanging around the building, or taking pictures of the building
- The landlord disappears and/or stops collecting rent.
How long does the foreclosure process take?
The court process takes an average of nine months. If the owner is not able to satisfy the bank’s requirements, the court puts the property up for sale where it is usually bought by the bank.
Where can I find information on the status of my building?
The most accurate way to find out information will be to get the PIN # of the property by going to www.newschicago.org. Once you have the PIN, and then call the Recorder of Deeds at 312 603 5050. For more information about the case you may then call the Chancery Court, at (312) 603-5133. You can also go to http://www.cookcountyclerkofcourt.org - go to online case info – full docket search – and search the chancery division for the landlord’s name under defendant, or using the case #.
Do I still have to pay rent?
Yes. As long as you are living in the unit you must pay rent. Checks or money orders are best so that you have proof of payment. You can still be evicted for nonpayment of rent even though your landlord is in foreclosure.
What if I don’t know to whom to pay rent or the landlord stops collecting it?
Contact a lawyer to assist you in determining the new owner of the property. Be sure to ask any new people claiming to be the owner for proof before giving them rent money. The law only requires that tenants make a good faith effort to pay the rent if the landlord disappears. Some examples of good faithefforts to pay rent may include:
- Holding the rent in a money order
- Using the rent on utilities your landlord was paying
- Using the rent to make repairs to the property
- Sending a letter via certified mail, requesting information from the new owner on where to send the rent. (Keep a copy of the letter for yourself)
Do I have the right to break my lease because my landlord is in foreclosure?
No…however, if you are covered under the Chicago Residential Landlord Tenant Ordinance and did not receive proper notice, please see below under Are landlords required to tell their tenants that their building is in foreclosure?
The bank has taken over the building. What do I do?
The bank is your new landlord. You must pay them rent once they have notified you as to whom and where to pay, and they are responsible for repairs, any utilities paid by the old landlord, etc. If you are uncertain of who to pay, hold your rent in escrow.
The sheriff posted a notice saying that my landlord or unknown occupants must vacate the building. Does this apply to me?
No. If your name is not on the notice, you do not have to move. Immediately contact the sheriff’s office at (312) 603-3365 to inform them that there are tenants in the building and contact an attorney to get legal help. If the sheriff shows up, you will need to show them identification, as well as your lease, a piece of mail, or other evidence proving that you are a
tenant in the building and not the landlord.
Will I have to move? How much time will I have once a new owner takes over?
If the building is foreclosed upon and sold, the new owner must give you 90 days or until the end of your lease, whichever longer. However, if the new owner would like to use the unit as a personal residence, they do not have to honor the lease, but they must give you at lest 90 days notice prior to eviction proceedings. Once the lease expires, the owner must give you a 30 day notice in writing before proceeding in eviction court. (This is assuming that you are lease complaint and up to date on rent.)
NOTE: The sheriff’s office can and will evict tenants during the winter, with the exception if it is 15 degrees or snowing.
Can the bank or new owner put me out without a court date?
No. If anyone tries to evict you before taking you to court, then it is an illegal eviction, also known as a lockout. Call the police, file a police report, and contact the Tenants Rights Hotline at 773 292 4988. If you receive a summons to court make sure to contact an attorney.
Will this eviction show on my record?
If you were evicted solely because of the foreclosure your attorney can petition the judge to seal the record. If you are evicted for nonpayment of rent, it will be on your record.
The bank offered me a “Cash for Keys” deal. What should I do?
Sometimes banks offer tenants a cash for keys deal in order to vacate the building more quickly. Evaluate the entire situation first and make sure you have enough time to find a safe and decent apartment. Make sure you get any deal in writing and talk to a lawyer before you sign. If the bank does not offer a settlement feel free to ask for one.
How do I get my security deposit back?
If your tenancy is NOT governed by the Chicago Residential Landlord Tenant Ordinance (CRLTO): The bank is not responsible for your deposit. If you do not receive your security deposit back within 45 days of moving you can take your landlord to court. If you know your landlord is in foreclosure court or is about to lose the building ask for written permission to live out your security deposit. If you live out your deposit without permission you can be evicted for non-payment of rent. If your tenancy is CRLTO please see below.
Additional Information for tenants who are covered under the Chicago Residential Landlord Tenant Ordinance (CRLTO): If you live in Chicago, the Ordinance governs your tenancy unless you reside in:
- An owner occupied building containing less than seven apartments;
- A hotel, motel, inn, rooming house, or boarding house (unless you have resided there for more than 31 days and pay rent on a monthly basis); or
- A hospital, convent, monastery, school dormitory, temporary overnight or transitional shelter, cooperative, or
- A building owned by your employer (assuming your right to live there is conditioned upon you being employed in or around the building).
What happens to my security deposit?
In the event that the building is lost to foreclosure, the lender is responsible if the landlord fails to return the security deposit.
Are landlords required to tell their tenants that their building is in foreclosure?
If your tenancy is governed by the CRLTO: The landlord is required to tell current tenants about foreclosure filings within seven days of being served with a foreclosure complaint. The landlord must also inform any potential tenants before they move in. Tenants who were not properly informed about the foreclosure can sue for $200 in damages and/or terminate their leases.
Additional References:
Building Inspectors: 311 (Call for an inspection if you have repairs that need to be made or are lacking utilities)
Assistance moving or with a security deposit: 311 (Inform the assistant that your landlord is in foreclosure)
Lawyers Committee for Better Housing: (312) 347-7600
Legal Assistance Foundation (Subsidized Tenants): (312) 341-1070
Sheriffs Eviction Unit: (312) 603-3365
Chancery Court: (312) 603-5133
Metropolitan Tenants Organization Tenants’ Rights Hotline: (773) 292-4988 Open: Mon-Fri, 1-5pm
Chicago Legal Clinic: 773 731 1762
Citizens Utility Board: 1 800 669 5556
I should really be working not reading this blog but its have some good info
Who owns the appliances in a foreclosed Condo?
Why are you asking this question? The appliance in an individual condo unit is the property of the person who purchased it, most likely the owner. If you are a tenant and appliance is a part of the lease or rental agreement (verbal or written) then there is an argument that the appliance needs to stay with the unit until the end of the rental period.
I rent a Condo, and a process server came by and tried to serve the owner, but could not since they do not live there. I have been paying my rent on time for the past 14 months via bank transfer and just printed the transactions. What recourse do I have against my landlord;
1. To leave an vacate the unit( I never resigned a new lease two months ago)
2. Try to get my security deposit back.
What should I do they won’t answer the phone or anything anymore.
Thank you,
It is impossible to answer your question without knowing the reason the process server is trying to contact your landlord. If it is because of foreclosure, the Chicago Landlord and Tenants Ordinance requires the landlord to notify you about the foreclosure action. If you are on a month to month agreement as it sounds like then the law allows tenants to leave by giving the owner a written notice to terminate the tenancy at least 30 days before the start of the rental period.
WHATS THE WORST THAT CAN HAPPEN IF I STOP PAYING RENT TO THE LANDLORD IF I JUST FOUND OUT HES BEEN IN FORECLOSURE FOR THE PAST YEAR AND NEVER MENTION ANYTHING TO ME IM ON A MONTH TO MONTH BASIS DONT HAVE A LEASE PLEASE ADVISE ME ON WHAT TO DO THANK YOU.
The worst thing that could happen is the landlord could give you a 5 day notice to pay of vacate. If you do not pay then the landlord can take you to eviction court. If you lose in eviction court you will have to move. If you do not then you could lose all your furniture. If you do move you could still end up with a judgement against you for the rent, which could impact your credit rating and other landlords sometimes look to see if you have been to eviction court which could affect your ability to rent. If you get the help of an attorney you could win but you asked for a worst case scenario.
The worst thing that could happen is the landlord could give you a 5 day notice to pay of vacate. If you do not pay then the landlord can take you to eviction court. If you lose in eviction court you will have to move. If you do not then you could lose all your furniture. If you do move you could still end up with a judgement against you for the rent, which could impact your credit rating and other landlords sometimes look to see if you have been to eviction court which could affect your ability to rent. If you get the help of an attorney you could win but you asked for a worst case scenario. I cannot advise you about what to do.
My building is in foreclosure. The attys. for the mortgage co. notified me of the court date. A default ord was entered, an order appointing a seller and the foreclosure is pending. Do I still pay rent? The attys. said the foreclosure sale is Jan. 31, 2012. Strangers come by and want to look at the apartment. I don’t know them. My landlord has not called me to bring anyone over. I’m not letting strangers in my home without the landlord being there. I don’t even know the real estate agent. He took my rent one day and a for sale sign was in front the next morning.The landlord does not communicate with me until its rent time. I feel I shouldn’t pay rent and just save my money to move. He’s not fixing anything and Jan is around the corner. I’ve never been evicted in my life and I don’t want to start now.I feel he is still the owner since no order of possession has been entered. But I feel I shouldn’t have to pay him a dime since I have to move. Around here they bring in their own families to live.I know my nephew used to live upstairs thats how I got this place.I mean Gee!! The guy could have said I’m in foreclosure and I’m trying to sell the building.
Hey- I rent a condo and he is trying to avoid a foreclosure by doing a short sale. My lease is not up until 2013. My owner told me that the lease goes with the property- meaning that they have to honor the lease and not put me out. From what i’m hearing, that’s not true. When the new owner takes over and he wants to 1) live in the unit 2) increase my rent 3) give me 90days for move.
My questions is when the unit is sold, regardless of my lease, they have to give me 90 day .. right? and within that 3 months do have still need to pay rent? will I receive my security deposit back from the new owner or do I just not pay for 2 months?
any suggestion would be helpful!!
If the building is sold and does not go through the foreclosure process the new landlord has to abide by the terms of the lease. The new landlord is responsible for the security deposit and you are responsible for paying the rent.
John
I am a tenant of a recently forclosed condo. I did not recieve notificaiton from the owner, I just received corespondence from the bank (owns condo now). They have offered me cash for keys if I need to vacate in 30 days. The oher option is to rent (but I don’t know the amount of rent) and the unit is for sale so if sold I would need to move out.
Don’t I have rights, 30 days is not a lot of notice!What can I do?
If you have a lease the Bank has to honor the lease which means paying the same rent until the end of the lease term. If you are on a month-to-month agreement then the bank has to give you at least a 90 day notice to terminate and you pay the same rent for that period. Make sure that any cash for keys agreement is in writing and make sure that the agreement covers such things what happens if you are a day or two late in vacating.
I am renting the upper portion of a house and came home this weekend to a notice on the door from a Prudential REO Broker who I contacted later with our notice to evict deadlines. He stated that the house was foreclosed upon and that we would soon have a packet arriving in the mail explaining our rights. Does this mean that the bank is now the owner of the property? Do we continue to pay rent to the landlord? We no longer have a current lease and are considered month to month.
According to Illinois law, if you have a lease then Prudential needs to honor the lease. If you are on a month to month agreement then Prudential needs to give you at least a 90 day written notice to terminate the tenancy. Yes you have to continue to pay rent. I would call Prudential to see where you should mail the rent. You may be able to negotiate a deal to move out sooner.