Posted On: November 20, 2010
Who Gets the Rent in Foreclosure?
With Florida’s rising rate of foreclosures, more tenants are getting stuck between a rock and a hard place when it comes to dealing with a landlord in default. One Jacksonville foreclosure attorney says tenants need to be aware of their rights when the property they are renting is in default.The 1-4 Family Rider – lenders usually attach a 1-4 Family Rider or Assignment of Rents to the mortgage or deed of trust when the property is intended to be used as a rental This rider covers property with one to four rental units, and assigns the right to receive rent to the lender if the buyer defaults on the mortgage. If your landlord is in default, you will receive written notice from the lender that payments are to be made directly to the mortgage holder.
Multi-Unit Properties – the principle is the same for rental properties with more than four units: in case of landlord default, the lender gets the rent.
Responsibility for maintenance and repairs, however, is not so clear. If a Family Rider is in effect, the lender has to apply rent money to property management expenses before applying it to the mortgage. However, the lender is still not the legal landlord...so tenants who need to have repairs made are often stuck.
If you need more information regarding Florida tenant rights, contact our Jacksonville, Florida foreclosure law firm.
Greg Gilbert
Keith Maynard
