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1. Landlord - Tenant
2. Transfers
3.,
4. Real Estate and Other Housing
5. Foreclosure
6. Foreclosure of Residential Residential Or Commercial Property

Foreclosure of Residential Residential Or Commercial Property

Topics on this page:

Effect of Foreclosure Sale on Purchaser and Tenant
Notice Required to Terminate Tenancy
Notice of Foreclosure Action
Notice of Impending Foreclosure Sale
Prohibition of Nonjudicial Eviction
Notice of Eviction
Summary of Required Notices
Collection of Rent

Maryland law supplies protections for tenants when the residential or commercial property is foreclosed. This post describes the rights of buyers and renters.

Effect of Foreclosure Sale on Purchaser and Tenant

The purchaser at a mortgage foreclosure sale has the very same rights and solutions versus the renters of the mortgagor (the tenants' original proprietor) as the mortgagor had, and the tenants have the same rights and treatments versus the purchaser as they had against their original proprietor on the day the mortgage was taped. So, where the lease predates the mortgage, a foreclosure sale will not end the lease. Where the tenancy started after the mortgage was taped, the renters still have particular rights regarding notification of the foreclosure action, the foreclosure sale and any notice of eviction. Read the Law: Md. Code, Real Residential Or Commercial Property § 7-105.8

Notice Required to Terminate Tenancy

Bone fide tenants of home are entitled to a minimum of 90 days notice before termination of the tenancy. A lease or tenancy is thought about "bona fide" just if the tenant is not the kid, partner or parent of the original landlord, the lease deal was made at arm's length (i.e., the lessor and lessee act separately), and the rent is not considerably less than reasonable market lease for the residential or commercial property (unless the unit's lease is lowered or supported due to a federal, State, or local aid). Read the Law: Md. Code, Real Residential Or Commercial Property § 7-105.8

If the foreclosed residential or commercial property has not been bought by an owner who will utilize the residential or commercial property as his main residence (an "owner-occupier"), the new owner seizes the residential or commercial property subject to any leases on the residential or commercial property and should enable the occupant to continue leasing the residential or commercial property till the later of:

- the end of the lease term, or
- 90 days from the date that notice of termination of the tenancy is provided to the tenant.

If an owner-occupier purchases the residential or commercial property, he can end the occupancy before the end of the lease term, however should provide the renter with a 90 day notification of termination. For occupants who are no longer under a lease and leasing at-will or month-to-month, the brand-new residential or commercial property owner, whether an owner-occupier or not, need to give the occupant 90 days notice before the renter has to leave.

NOTE: If the foreclosure sale was advertised as going through 1 or more occupancies, those leases are unaffected by the sale, except the purchaser ends up being the property manager, since the date of the sale.

The required 90 day notice should:

1. Remain in writing;
2. Be sent out by top-notch and certified mail, return invoice requested;
3. State the date on which the notice is being offered;
4. State the date on which the termination of the tenancy works; and
5. State whether the basis for termination of the occupancy is the expiration of the lease term, sale of the residential or commercial property to a purchaser who will occupy the residential or commercial property as a primary home, or termination of a month-to-month or at-will occupancy.

The requirements for termination of any federal- or State-subsidized occupancy, or of any State or local law that supplies longer period or extra defense for tenants, supersedes these notification arrangements. Read the Law: Md. Code, Real Residential Or Commercial Property § 7-105.8

Notice of Foreclosure Action

In addition to any other notification required to be offered by Maryland law, the individual authorized to make a sale of home in a foreclosure action should send out a different written notification according to the list below requirements:

- notice sent by first-rate mail
- in at least 12 point type
- resolved to "all occupants"
- at the address of the house
- the address side of the envelope need to display the following: "IMPORTANT NOTICE TO ALL OCCUPANTS: FORECLOSURE INFORMATION ENCLOSED. OPEN IMMEDIATELY." - in strong, capitalized letters of at least 12 point type
- be sent at least 45 days before the foreclosure sale could happen

IMPORTANT NOTICE

A foreclosure sale of the residential or commercial property may happen at any time after 45 days from the date of this notification.

Below you will find the name, address, and phone number of the person authorized to sell the residential or commercial property. You might call this individual to alert him or her that you are a renter at the residential or commercial property and to learn more about the sale. For further information, you may examine the file in the office of the clerk of the circuit court. You also may get in touch with the Maryland Department of Housing and Community Development, at (insert phone number), or consult the Department's website, (insert website address), for assistance.

Person licensed to offer the residential or commercial property:

( Name).
( Address).
( Telephone).
( Date of this notice)

In addition to the notice described above, the individual licensed to make a sale of home in a foreclosure action should send a separate written notification according to the following requirements:

- notification sent out by top-notch mail.
- in a minimum of 12 point type.
- addressed to "all occupants".
- at the address of the residential property.
- the address side of the envelope must show the following: "IMPORTANT NOTICE TO ALL OCCUPANTS: FORECLOSURE INFORMATION ENCLOSED. OPEN IMMEDIATELY." - in vibrant, capitalized letters of at least 12 point type.
- be sent out not earlier than 30 days and not behind 10 days before the date of sale

NOTICE OF IMPENDING FORECLOSURE SALE

A foreclosure action has actually been submitted against the residential or commercial property located at (insert address) in the circuit court for (insert name of county). This notification is being sent to you as a person who resides in this residential or commercial property.

A foreclosure sale of the residential or commercial property is scheduled to take place as follows:

Date: ________________________.
Time: ________________________.
Place: ________________________

Most renters can continue renting the residential or commercial property after it is sold at foreclosure. The foreclosure sale buyer ends up being the new property manager.

Most renters with a lease for a specific period of time can continue leasing the residential or commercial property until the end of the lease term. Most month-to-month tenants deserve to continue renting the residential or commercial property for 90 days after receiving a composed notification to vacate from the new owner.

You ought to get legal guidance to determine if you have these rights.

Below you will discover the name, address, and phone number of the individual licensed to sell the residential or commercial property. You may call this individual to notify him or her that you are an occupant at the residential or commercial property and to learn more about the sale. For more details, you might evaluate the file in the office of the clerk of the circuit court. You likewise might contact the Maryland Department of Housing and Community Development, at (insert phone number), or consult the Department's, website, (insert site address), for support.

Person authorized to sell the residential or commercial property:.
( Name).
( Address).
( Telephone).
( Date of this notice)

Prohibition of Nonjudicial Eviction

The individual who purchases house in a foreclosure sale or claims a right of ownership may not take belongings or threaten to acquire the residential or commercial property from a safeguarded homeowner by locking the homeowner out of the home, cut off vital services, such as gas, heat, water, electrical energy, etc, or take any other action that deprives the safeguarded local of real ownership. Read the Law: Md. Code, Real Residential Or Commercial Property § 7-113

Notice of Eviction

A property expulsion after foreclosure sale follows this timeline:

- purchaser purchases the residential or commercial property at foreclosure sale.
- buyer informs tenant of termination of tenancy, offering the tenant 90 days to move.
- if renter does not leave, buyer files a Movement for Judgment of Possession.
- court goes into a Judgment of Possession to buyer

After the entry of the judgment of possession, the buyer should send out a notice according to the following requirements:

- composed notice.
- sent by first-class mail.
- written in least 12 point type.
- dealt with to "all occupants".
- at the address of the domestic home.
- the address side of the envelope should display the following: "IMPORTANT NOTICE TO ALL OCCUPANTS: EVICTION INFORMATION ENCLOSED. OPEN IMMEDIATELY." - in vibrant, capitalized letters of a minimum of 12 point type)

The notice need to significantly remain in the list below form:

IMPORTANT EVICTION NOTICE

The circuit court for (insert name of county) has actually gotten in a judgment granting ownership of the residential or commercial property located at (insert address). YOU COULD BE EVICTED FROM THE RESIDENTIAL OR COMMERCIAL PROPERTY ON ANY DAY AFTER (insert first date after which expulsion could legally happen under State and regional law).

Below you will find the name, address, and telephone number of the person who acquired the residential or commercial property or the purchaser's agent. You might call this person to discover more about the court order. For further info, you might evaluate the file in the office of the clerk of the circuit court. You might wish to speak with a lawyer to determine your rights. You also may call the Maryland Department of Housing and Community Development, at (insert telephone number), or consult the Department's site, (insert website address), for help.

Purchaser of the residential or commercial property or purchaser's representative:
( Name).
( Address).
( Telephone).
( Date of this notice)

Read the Law: Md Code, Real Residential Or Commercial Property § 7-105.11

The person giving a notice required by this section should file in the foreclosure case after each notification is sent an affidavit of compliance with the arrangements of this area.

In the event of postponement of the sale, which may be done at the discretion of the person licensed to make the sale, no brand-new or additional notification needs to be given pursuant to this section.

Summary of Required Notices

First Notice - Foreclosure filing in court (sale may happen after 45 days)

- 10-30 day notification to occupant of foreclosure sale's scheduled date and time

- Transfer of title, occupant has 90 days to abandon.
- Note: a non-bona fide occupant can not take benefit of the 90 day notification requirement and buyer can submit the movement for judgment of possession immediately

- Tenant must be served with a copy of the motion for judgment of belongings.
Md. Rule 14-102

- Court gets in a judgment of possession

Collection of Rent

A foreclosure sale purchaser might not exercise any right to collect lease payments from a bona fide tenant in possession of a residential home unless the buyer:

1. Conducts a sensible questions into: 1. The tenancy status of the home; and.
2. Whether any individual in belongings of the home is an authentic renter; and

1. Contains the name, address, and contact number of the buyer or the agent of the buyer who is responsible for managing and maintaining the home; and.
2. States that rent payments must be directed to the purchaser or the agent.

A foreclosure sale purchaser waives any claim to lease payments from an authentic occupant in ownership of a house for any duration of time before the buyer satisfies the requirements of this section, except that the waiver does not apply to lease for usage of the home for the 15 days right away prior to the date the purchaser pleased the requirements of this section. Read the Law: Md. Code, Real Residential Or Commercial Property § 7-105.12

Is this legal advice?

This site uses legal info, not legal advice. We strive to ensure the precision of the info and to plainly explain your choices. However we do not provide legal recommendations - the application of the law to your private scenarios. For legal recommendations, you ought to speak with a lawyer. The Maryland Thurgood Marshall State Law Library, a court-related company of the Maryland Judiciary, sponsors this website. In the absence of file-specific attribution or copyright, the Maryland Thurgood Marshall State Law Library may hold the copyright to parts of this site. You are complimentary to copy the info for your own usage or for other non-commercial functions with the following language "Source: Maryland's People's Law Library - www.peoples-law.org.