Is Your Landlord In Foreclosure?


By Malik Ahmad

Important information tenants should be aware of:

1. What happens if I am renting a house or apartment that is in foreclosure?

In Nevada, foreclosure is a legal process. It can be sold in an open auction pursuant to a trustee’s deed. There is no other judicial action required in common legal courts. The foreclosure process is complete by this foreclosure auction, or non judicial process. Your landlord still owns the house or apartment until a court grants a judgment in foreclosure and the property has been sold at a sheriff’s sale.

2. How will I know if a foreclosure has been filed or a judgment in foreclosure has been granted?

You would receive a notice of default. Once the time period run out, the foreclosure date is set in an open auction. If no one comes and buys, the bank usually buys it themselves free and clear.

3. Can I find out what is happening in the foreclosure case?

YES. Clark County Assessor’s Office may have the relevant information or you can personally go to the Legal News office on 3rd street and get information.

4. Do I need to keep paying my rent once the foreclosure is filed?

Your landlord still owns the property until there is a sale. If you stop paying your rent, your landlord could file an eviction action in court for nonpayment of rent. Again, your landlord is a defective landlord who has not caught up with his mortgage payments. Under the lease agreement, you suppose to pay him/her rent and he/she suppose to pay mortgage regularly. He has not been doing this obligation. Every contract has rights, and obligations. However, each person’s situation is different, and there are many practical issues you may want to consider in making a decision to stop paying rent or to move. You may be in the best position to decide whether your landlord will take legal action against you.

5. Can I move-out and terminate or break the lease after the foreclosure is filed?

In most situations the answer will be and depends on the terms of your lease agreement. The foreclosure filing does not allow you to break your lease to move. If you unlawfully break your lease, your landlord could sue you for money damages for leaving early. If you decide that you want to move, you may want to negotiate with your landlord to terminate your lease early. If you do negotiate something, make sure to get the agreement in writing and have everyone, including your landlord, yourself, and anybody else on the lease sign the agreement.

6. Will I be able to remain in the house or apartment once the foreclosure is completed?

PROBABLY NOT.

The answer depends on whether the new owner, who purchased the property at the foreclosure sale, wants to keep you as a tenant. Typically the lender (the plaintiff) buys the property back at the sheriff’s sale. Most lenders have no interest in becoming a landlord.

7. How much time will I have to move?

This question is much more complex than it would appear. It depends on many factors that can vary from county to county. There is no timeline set out in the law. Your local sheriff’s department may be able to give you some general timelines, but will probably not be able to give you a specific date. Likewise, if the new owner is now required to file an eviction action in court, the time varies from county to county.

8. Is my landlord still required to perform his/her obligations while the property goes through the foreclosure process?

YES. Until the statutory foreclosure is not complete, your landlord must still fulfill all of his/her obligations under the lease and law, just like you must continue to pay rent. Therefore, your landlord is still responsible for making repairs, paying any utilities he/she agreed to pay, etc.

9. Must I keep paying rent to my landlord once the foreclosure becomes final?

NO. At this point your landlord no longer owns the property and is not entitled to collect rent. Of course, as stated above, you may not know when this occurs, so you may want to check the progress of the case with your local county clerk.

10. Can the Court evict me in the foreclosure action?

IT DEPENDS. If you have been personally named (by your name, NOT as a “Jane/John Doe, Unknown Tenant”) and received a copy of the complaint, the answer is “yes.” If you have not been properly personally named (for instance only as “Jane/John Doe, Unknown Tenant”) and
served, the answer is “no.” However, the new owner only needs to serve you with a three-day
notice and after the three days file a separate eviction action in court in order to force you to, so you still may not have much time to move. If a separate eviction action is filed, a hearing must be scheduled on the eviction. You should go to court and try to negotiate a date for you to move. If not, and you are evicted, a time would be set by the court for you to move.

11. Is there any place I can get more information or legal assistance?

YES. Your local legal aid program should be able to provide you with more specific information based on your location and the particular facts of your case or call the law office of Malik W. Ahmad at (702) 270-9100. Best thing is to send him an email at: Malik@lasvegaslawgroup.com

3 Comments

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  2. I would just like to know if the house I just put a security deposit on that I found thru craigslist is in foreclosure. The address is 5227 cardinal flower ct, in north las Vegas. The house is for rent, thank you. You can reach me at 702-553-9326

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