Q We are renting a property that is up for sale today via auction. We have been told by two different attorneys that we are not bound by the lease once the property is no longer owned by the landlord as of the sale/auction date, so I would like to get your feedback on that.
Our lease is up in June. What if we move prior to this? What is our obligation once the property is sold?
Also, the other side of the duplex where we live has been sold and the redemption period ended last week. Our neighbor indicated that an attorney visited him on Thursday, and he was told that he has two weeks to get out -- not 30 days.
A Sorry to hear about your situation, and sorry you are getting such conflicting information. First, in a foreclosure action, there is usually a sheriff's sale. The period after the sheriff's sale is called the "redemption period." During this period, the person whose interest was foreclosed has the right to redeem the property by paying all amounts owed to the mortgage holder.
The length of the redemption period can vary based on how much has been paid down on the loan, the date the loan was originated, or whether the property is vacant, but it is generally six months.
In Minnesota, a landlord technically retains "possession" of the property during the redemption period, as well as many of the rights of ownership. This means that unless a court orders otherwise, the landlord continues being the landlord and the tenants are still bound by the lease.
If a tenant simply stops paying rent to the landlord, a landlord can bring an eviction action against the tenant, and even if the tenant argues that they thought they no longer had a duty to pay rent, or were unsure to whom the rent was to be paid, the tenant will be evicted unless they come up with the outstanding rent and will not likely be able to expunge the eviction from their record.
Minnesota Statute 504B.285, subdivision 1(1)(i)-(iii), covers the notice period that a mortgage holder must give a tenant, and requires one month's notice. The mortgage holder can have the notice take effect the day the redemption period expires, provided that the mortgage holder states in writing that they are willing to indemnify the tenant for breaching the lease if the landlord redeems.