Investors are buying foreclosed homes in record numbers.  In an Inman News article, columnist Janet Portman answers whether you can collect back rent on a foreclosed home purchase.

photo credit: Springs Summit Group

Portman states that the new owner not only purchases the physical property but also the rights and responsibilities of the former owner, which in this case was a bank. If the tenants stayed on during the purchase, then rent will be expected to be paid to the new owners with the same terms of the original lease. The new owners have all the obligations to fulfill for the tenants, as well.

"The former owner also had the right to demand back rent, by delivering a "pay or quit" notice. Most owners send these notices after one, or at most two, missed rent payments," said Portman, and the new owner has the right to demand any unpaid rent is paid up.

"You'll need to check your state law to see how much rent you can demand in a "pay or quit" notice delivered to your tenants." added Portman.  "If you are limited and want to collect the balance, you'll need to go to small claims court. But don't be surprised if you find a judge in an eviction lawsuit (if it comes to that) bending over backwards to find a way not to sock these tenants with a judgment for a full year's rent."

Read the full story at Inman News.

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Posted in Buyer Resources, Real Estate Market Conditions, Blogging

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