Tenant's Rights in Foreclosure in Maryland

Foreclosures can gravely impact tenants. Maryland has several policies in place that can help protect tenants when their rental unit is foreclosed on by their landlord. These policies allow for tenants to maintain their good rental history and enforce their rights against their landlord's foreclosure.

Rent Payment

In the case of a foreclosure, tenants are still expected to pay rent under Maryland law. If a landlord fails to maintain his rental, the tenant must go to court and set up an escrow account. He is to pay rent to this account until the landlord resumes maintenance. This provides a record that the tenant is paying rent so he won't be evicted for non-payment.

Transfer of Ownership

It is possible that the new owner of the property may wish to continue renting it out. The old lease will be null and void. A new lease does not need to honor any of the provisions of the old lease. Tenants are expected to pay rent to the new owner until they are notified that they must leave.

Foreclosure Eviction Rules for Tenants

The Federal Protecting Tenants at Foreclosure Act of 2009 stipulates that as long as the rental property is not being purchased by an "owner-occupier," the original lease must be honored. If the new owner wishes to occupy the residence, she must provide 90 days notice for the tenant to vacate as well as make three attempts via first class mail to the tenant between 30 and 10 days after the foreclosure action has been filed in court.

Tenant's Rights with Original Landlord Post-Eviction

The original landlord is obligated to honor the lease regardless of their situation. According to the Maryland Attorney General's Office tenants may sue the landlord for breach of the lease agreements (as they were not provided the opportunity to rent for the full term), moving expenses, costs incurred from finding a new rental, application fees and the difference in the cost of similar rentals in terms of rent for a given period of time. If the landlord fails to return the security deposit, they may sue for up to three times the amount.

References

• Maryland Attorney General's Office: Consumer's Edge- Landlord Foreclosures
• People's Law: Foreclosure of the Property