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TJ, Esq.
TJ, Esq., Attorney
Category: Real Estate Law
Satisfied Customers: 12419
Experience:  JD, MBA
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I am a homeowner in Maryland. I am a federal employee. I was

Customer Question

I am a homeowner in Maryland. I am a federal employee. I was transferred overseas a year ago and had an employer provided property management company rent my home. At the time, my property was going through foreclosure and I was going through a loan modification
application. (A process which has taken over a year) My application is now complete and is in final review and I am told that I stand a good chance of being approved. During this rental, I was not able to pay any of the collected rent to my mortgage as the
mortgage company would not accept any payments. My tenant wrote a letter to my employer and I am now under administrative investigation for fraud as the tenant claims it was illegal to rent the property to him. Can you advise if it was against the law to do
Submitted: 2 years ago.
Category: Real Estate Law
Expert:  TJ, Esq. replied 2 years ago.

Hello and thank you for the opportunity to assist you. My name is ***** ***** I will do my very best to answer your legal questions.

No, it is not unlawful to rent property and collect rental fees even though your house is in foreclosure. I don't know what fraud the tenant can complain of ... after all, you gave him exactly what he bargained for (i.e., a roof over his head). Despite that logic, I have certainly seen people argue that they shouldn't have to pay rent if the house is in foreclosure. I just can't understand their thinking. The lease is between you and the tenant. The mortgage is between you and your lender. The tenant has nothing to do with the mortgage.

Does that answer your question? Please let me know if you need clarification, as I am happy to continue helping you until you are satisfied. Also, please remember to provide positive feedback. Thanks!

Customer: replied 2 years ago.
Thank you for your answer. Is there any legal reference you can point me to which would support this? Thanks.
Expert:  TJ, Esq. replied 2 years ago.

Hi again.

I looked on Westlaw, and could find nothing relevant. The problem is that there would only be case law if a tenant were to actually sue a landlord who was facing foreclosure, and it were appealed. In my opinion, the fact that there is no such case law indicates that the tenant has no case. If he did, then there would be lawsuits, and there would be appeals. I have never seen anything indicating that the tenant has any sort of case for the reasons stated earlier (which, quite frankly, is basic contract law). The bot***** *****ne is that tenants must pay rent because of their contractual obligations under the lease. A foreclosure doesn't alter those obligations. Moreover, Maryland specifically protects tenants who have a bona fide lease in that purchasers at a foreclosure sale must honor the lease. This further indicates that the tenant is not harmed by the foreclosure and has no legitimate complaint against the landlord.

Expert:  TJ, Esq. replied 2 years ago.

Hello again. I didn't hear back from you, so I'm just checking in to make sure that you don't need more help on this issue. If not, then please remember to provide a positive rating to close out this question (and please remember that your positive rating is the only way that I'll get credit for helping you, so I greatly appreciate it). Thank you!