The current economic downturn and recession have presented new challenges in connection with rental properties in Orlando and surrounding Central Florida areas.  Now more than ever, it is vitally important that you have a complete understanding of your rights, obligations, and remedies regarding a rental property transaction or situation.

As a landlord, your tenant comes to you one day and informs you that he was served with a summons and complaint for mortgage foreclosure and has the right to terminate the lease or, at minimum, stop paying rent.  Generally speaking, your tenant would be incorrect.  Your written lease is still legally binding upon the tenant until such time as the tenant’s leasehold interest is foreclosed upon the issuance of the Certificate of Sale.  This is partly due to the fact that you, as the owner of the property, have the right to redeem your interest in the property up until the Certificate of Sale is issued.  Until this event occurs, the tenant still has the obligation to timely pay the landlord rent and fulfill his other obligations under the lease.

Under a recently passed federal legislation entitled Protecting Tenants At Foreclosure Act of 2009, however, certain tenants now have rights post foreclosure sale.  This Act provides that when a lender forecloses its “federally-related” mortgage on a residential property, the person or entity taking title to the property via a Certificate of Title post foreclosure sale assumes the property subject to the rights of a tenant who is not the borrower or the child, spouse, or parent of the borrower.  If this new owner desires to evict the “bona fide” tenant, the new owner must now give the tenant a 90 day notice to vacate.  The new owner may also have to honor the term of the tenant’s “bona fide” lease if the lease requires the receipt of rent that is not substantially less than the fair market rent for the property.  In such case, the tenant may remain on the property until the expiration of the term of this “bona fide” lease unless the new owner has sold the property to a purchaser who will occupy the property as a primary residence subject to the 90 day notice to vacate.

Florida real estate law and regulations are very comprehensive and contain very specific requirements that are constantly evolving.  It is imperative that a landlord, tenant, realtor, or property manager consult with a competent real estate attorney to determine their rights, obligations, and remedies concerning rental property issues.

– Henry M. Cooper, Esq., handles the residential real estate practice of Bogin, Munns, & Munns, P.A., a full service law firm with offices in Orlando, Clermont, Kissimmee, Deltona, Daytona Beach, Ocala, Melbourne, Gainesville, and Leesburg, Florida.  He welcomes questions and comments regarding the above and can be reached at hcooper@boginmunns.com.

NO LEGAL ADVICE: This blog entry is not intended as legal advice nor should you consider it as such. It is intended only as general information.  You should not act upon this information without retaining professional legal counsel. Please keep in mind that merely subscribing to or reading this blog or otherwise contacting Bogin Munns & Munns, P.A. in the manner that you have will not establish an attorney-client relationship with our firm. Bogin Munns & Munns, P.A. cannot represent you until the firm knows there would not be a conflict of interest, and the firm determines that it is otherwise able to accept the engagement.