Q My sister is renting a home in Spring Lake Park for $1,400 a month. This evening, a woman came to her door and handed her some legal documents, which said the house is due to be foreclosed on and there will be an auction Sept. 4. Her landlord will not return her calls.
When she moved in a year ago, she had to have first and last months' rent and a damage deposit. She had no idea there were foreclosure proceedings going on.
How long before she has to leave the house? How should she get her damage deposit back? Can she be compensated for being put out of her home without any notice?
We think the owner may have rented out this house illegally, meaning she never informed whomever that the house was not homesteaded. My sister is an emotional wreck and this is going to be very difficult for her young daughter, too.
A My heart goes out to you and your sister. I am getting many questions such as this one. The short answer is that even though there is a sheriff's auction on Sept. 4, that does not mean your sister has to move out on that date.
In Minnesota, there is a period after the sheriff's auction during which the property owner can redeem the property from the mortgage holder.
This period, called the redemption period, generally lasts six months. During this time, no one can put your sister out of the house, as long as she complies with the lease.
The six-month period can be shortened only if the property is vacant or for other similar reasons to protect the mortgage holder. Your sister's credit can't be ruined if it is found out she is living at the property pursuant to a lease, so she should make sure to let people know she is occupying the property. This will prevent the landlord from bringing a motion to expedite the redemption period because the house is empty.
The mortgage holder has to give your sister a two-month notice to vacate the property. (This is a change effective Aug. 1, 2008. The old law only required one month.) This notice is different from most notices as it does not have to be for the end of a month; it can just be exactly two months. So, if notice is given on Aug. 5, your sister has to be out of the property by Oct. 5.
The earliest date that the notice to vacate can be effective is the date the redemption period expires, if the mortgage holder agrees to be responsible for the lease if the property owner redeems, or one full month after the expiration of the redemption period. Once the redemption period expires, your sister should begin paying rent to the mortgage holder if the mortgage holder so informs her in writing.
The bigger problem is rent. Your sister has a legal obligation to pay rent to the landlord during the redemption period unless notified otherwise by the landlord or a court. If your sister cannot reach the landlord, she may be worried about whether the rent is getting to the landlord and whether she is getting credited for the rent. She should make sure to save copies of any checks or money orders she uses to pay the rent, and may want to send the rent via certified mail to make sure it is being picked up and to show it was mailed.
If she has no address for the landlord, then she should consider opening a rent escrow account at the housing court in the county where she lives. They have the necessary forms. If the account is still open after she moves, she can reclaim the money. If the landlord tries to evict her for nonpayment before she moves, she can prove she paid the rent into court and will not have an eviction notation on her record.
If the landlord sells the building to some third party before the redemption period expires, then she should pay the rent to the third party after receiving written notice from the landlord. If the third party redeems the property from the mortgage holder, then the third party takes the property subject to the lease, and your sister's lease goes forward as though there was no change in ownership.
The current landlord holds the damage deposit and the other amounts and is liable for this amount up to the date the redemption period expires. After that date, the mortgage holder, as a successor, is probably liable for the damage deposit and last month's rent, even if they did not get it from the original landlord. During the time after the redemption period, she has to pay rent to the mortgage holder and should raise the issue of last month's rent.
Some unscrupulous people are meeting with tenants and requiring that they move early and pay a fee in exchange for being let out of the lease. Your sister should not be fooled by these people. While a mortgage holder may send someone by to see if the house is occupied, all communication about vacating the property should be in writing. The lease expires at the end of the redemption period, so the tenant gains nothing by paying a fee to be let out of the lease. If someone comes to talk with your sister about moving early, she should ask that they provide any such request in writing.
Kelly Klein is a Minneapolis attorney. Do not rely on advice in this column regarding a legal situation until you consult a qualified attorney; information provided by readers is not confidential; participation in this column does not create an attorney/client relationship, and no such relationship is created without a retainer agreement with Klein. If you have questions concerning renting, you can e-mail her at kklein@kleinpa.com, post your questions at www.startribune.com/kellyklein or write in care of Star Tribune, 425 Portland Av. S., Minneapolis, MN 55488.
