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What to Do First

Produced by Mariah Jennings-Rampsi
Reviewed May 2017

If you think your rental unit may be foreclosed, protect yourself right away:

  • Keep paying your rent,
  • Find out who to send your rent to,
  • Find out who to contact if your unit needs repairs,
  • Take a first time homebuyer’s course, if you think you may be able to buy your rental unit.

1. Keep Paying Rent

Paying your rent is good for you.

  • It helps the owner pay her mortgage and avoid foreclosure. If there is a foreclosure, a new owner may want to move into your unit or raise the rent.
  • It helps you stay in your apartment if there is a foreclosure. If you pay the rent and you are a “bona fide tenant” or tenant at will with a month-to-month tenancy, you can only be evicted if your new landlord wants to move in or the landlord has “just cause.” See What is a “Bona Fide Tenant”?

Important!

Pay your rent by check or get receipts. If the new owner tries to evict you, you can prove you paid your rent, even if it was to the old owner after the foreclosure.

What is a “Bona Fide Tenant”?

You are a “bona fide” tenant if:

  • You moved into your apartment before the foreclosure,
  • Your rental agreement was not based on a personal relationship with the old owner (lawyers call this an arm’s length agreement), and
  • You are not the old owner’s spouse, parent or child.4

When to Pay

Your landlord’s foreclosure may put your housing at risk. Pay rent before and after the foreclosure.

Who to Pay

If the foreclosure is not final, pay the same person you paid before. Once the foreclosure is complete, stop paying the old owner. Start paying the new owner. Pay even if the new owner does not ask you to pay. If you do not know who the new owner is, see: Find Out Who the Owner Is in this chapter

The new owner should send you a notice that tells you where to send your rent. The new owner should also put a copy of this notice under your door.5 If not, send the new owner a letter asking where to send your payment. You can use Sample Rent Offer Letter (Form 26) for your letter. Keep a copy of the letter for your records.

If the new owner does not respond or does not accept your rent, put your rent money in a separate bank account. This will protect you if the new owner tries to evict you or says you did not pay rent.

If you have the rent money you have power if the new owner tries to evict you. You can:

  • Pay the new owner the rent you set aside if the new owner will let you stay;
  • Leave if the new owner agrees not to collect the old rent payments; or fight to stay in your unit even if the landlord tries to evict you in court.

What to Pay

If the new owner asks about your rental agreement, like how much rent you pay and if you pay for heat or electricity, answer her questions. Keep paying the same rent amount. The new owner can only raise your rent if she takes you to court and proves that the rent you pay now is “unreasonable.”6

2. Find Out Who the Owner Is

Before the Foreclosure

Until the property is sold and the foreclosure is complete, the owner of your rental property is the same as before. Sometimes, the owner can make an agreement with the bank and stop the foreclosure, even as late as the day of the auction.

At the Foreclosure

Anyone can buy the property at the foreclosure auction, including:

  • You or another tenant,
  • Any other person or company, or
  • A bank.

After the Foreclosure

If the foreclosing bank buys the property and becomes the new owner, it will probably sell the property later. They will probably use a real estate broker or lawyer.7 The bank’s broker or lawyer may be the only contact you have with the new owner.

After the foreclosure, you need to find out who the new owner is so you can:

  • Pay rent,
  • Get help with needed repairs or other problems,
  • Protect yourself from eviction, and
  • Protect your security deposit and if you paid it, last month’s rent.

If you were not told who the new owner is, there are several ways to find out:

Notice in the Common Area – The new owner must post their contact information in the common area of your building.8 Not all new owners do this, but if the contact information in the common area has changed, that is probably the new owner.

Notice from the Bank – The foreclosing bank must send a notice to all tenants within 30 days of the sale.9 Important: Keep all letters the bank sends you together, in a safe place.

Letter from the New Owner – If the foreclosing bank is the new owner, the bank or its lawyer will send you a notice about where to send your rent.10 Caution! If someone other than the bank asks you for rent, ask for proof that they own or manage your building.

Ask the Real Estate Broker or Lawyer – Sometimes the new owner's real estate agent or lawyer will contact you. Ask for proof that they work for the new owner and ask them who the new owner is.

Check Public Records & Auction Notices –Check your County Registry of Deeds online to see if a Servicemembers Civil Relief Act Petition or judgment has been filed. You can search using the property address. If it has been filed, the foreclosure process was started. Look on the petition or judgment to find the name of the bank and the bank’s lawyers. You can call the lawyer’s office, they may tell you the status of the foreclosure. You can call the bank and ask if there is an auction scheduled or if one has taken place. Also search your County Registry of Deeds online for a foreclosure deed.11 If you find one for your address, the property has already been foreclosed, and the foreclosure deed will list the new owner’s name.

Important

Not all new owners record the foreclosure deed right away. The foreclosure sale may be complete even if you cannot find the foreclosure deed at the Registry of Deeds.

Check the records at your town’s Tax Assessor’s Office. Banks must notify the local tax assessor’s office when they sell a property at a foreclosure sale.12 Some Tax Assessor’s Offices let you search for this information online.13 Other offices require you to call or go in person.

Contact MERS – They are a private company that tracks mortgage loans nationwide. They will probably know if the bank has hired a servicer to manage the foreclosure. Call toll-free: 888-679-6377, or visit: their website.

Check Auction Listings –Some auctioneers have websites where they list upcoming and recently completed auctions. Try:

www.harmonauctions.com

www.re-auctions.com

www.baystateauction.com.

The bank must also list auctions in print newspapers. Look for a notice in Banker and Tradesman and your local newspaper.

padlocked folderKeep all letters and papers that old owners, new owners, and banks send you together in a safe place.

Endnotes

4 . G.L. c. 186A, §1.

5 . G.L. c. 186A, §3.

6 . G.L. c. 186A, §5.

7 . Mortgages are often bought and sold, so the holder of the mortgage at the time of the foreclosure sale may not be the same company that gave your landlord her original loan. Many mortgages have been packaged into "investment vehicles" and sold to groups of investors. These investors often form a trust and hire a bank as the trustee of the trust. The trustee usually works with one or more "servicers," companies that collect payments and manage the foreclosure process. It may be hard for you to identify the servicer who is managing the apartment you rent, even though the servicer is often the company that is making decisions about what will happen to the building and the people who live in it. The lenders also usually work with real estate agents who list and sell the property after foreclosure.

8 . G.L. c. 186A, §3; 105 C.M.R. §410.481.

9 . G.L. c. 244, §15A.

10 . G.L. c. 186A, §3.

11 . www.masslandrecords.com

12 . G.L. c. 244, §15A.

13 . For Boston, at www.cityofboston.gov/assessing/search/; for Springfield, at www3.springfield-ma.gov/finance/assessors/; for Worcester, at www.worcesterma.gov/e-services/search-public-records/property-values.

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