Question:

Does the tenant have any rights in the foreclosure process?

by Guest784  |  6 years, 7 month(s) ago

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Does the tenant have any rights in the foreclosure process?

 Tags: foreclosure, process, rights, tenant

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  1. Guest785

     Not really. A tenant does have rights, but most of them come second to the rights of the bank.

    When it comes to land, the people with the strongest rights are those "registered on title". This means that their rights (their mortgage, protecting the money they are owed) are listed on the title to the land.

    When a person buys a house, they often do not have the full amount needed to pay for the house, so they will commonly get a "mortgage." A bank lends that person money to buy the house and the person must pay the money back to the bank over time. In the meantime, the bank registers a mortgage on the title, which gives them the right to foreclose against the property if the person does not pay the bank what the bank is owed. This means that the landlord is legally the owner of the house, but the house is collateral for the money that was borrowed to buy the house. In this case, the bank is known as a "secured creditor."

    Sometimes, there may be more than one mortgage registered on title. These debts are listed in the order that they occur. This means that if the house is sold and the "first" debt is fully paid, leaving some money left over, the second debt that is listed can now be paid, and so on.

    A residential tenancy agreement is usually not listed on title, and if it is, will almost always be listed after a mortgage. As a result, the tenant’s rights come after the rights of those who have their interests registered on title.

    In fact, there is no obligation for a landlord to inform tenants of the foreclosure. As a result, it is very rare that a tenant can do anything to preserve their rental arrangement.

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