How to Setup an Escrow Account for the Rent for a Foreclosed Home
Tenants have the right to rent a home in foreclosure and may even remain in the home after it is foreclosed. A rental escrow account is a bank account established by court order that allows you to deposit the rent for the owner of the home. Escrow accounts are generally used when the landlord is not maintaining the home. Instead of withholding rent yourself, request an escrow account supervised by the court.
Other People Are Reading
Instructions
-
-
1
Know your obligations. Even after a foreclosure sale, some states have a redemption period that allows the homeowner the chance to reverse the foreclosure by purchasing back the home. The length of the redemption period varies among states. As long as the redemption period is in effect and you still have a lease, you are required to pay the homeowner monthly rent as agreed.
-
2
Contact the court if you are unsure who currently owns the home. When ownership changes during your lease agreement, you are not required to remain in the home. If you choose to move out of the home, you have 90 days to vacate, regardless of who owns the home. You also have the right to finish your lease for a period of 180 days, provided the new owner did not purchase the home with the intent to make it his primary residence.
-
-
3
File a Petition for Rent Escrow at your local district court if the landlord is not fulfilling the lease agreement or fails to comply with health and safety codes.
-
4
Send a letter to the new owner asking how you should pay rent. Sometimes the new owner, which can be a bank, is not willing to accept rent. This does not mean you can live in the home for free. It is necessary to set aside rent in case the bank requests the funds at a later date.
-
5
Attend the scheduled hearing. Depending on the district, the hearing may be scheduled immediately. In other cases, it may take several weeks before you receive notice of a hearing. If your petition is denied and the new owner is not willing to accept rent, deposit the rent in a separate, designated bank account you set up yourself.
-
1
