What Happens to a Tenant if the Landlord Doesn’t Pay the Property Tax

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Have you ever wondered what happens to a tenant if the landlord doesn’t pay property tax? You could need to find a new place to live or you may be able to stick it out until the end of your lease. It just all depends. Find out what you need to know.

What Happens to a Tenant if the Landlord Doesn’t Pay the Property Tax

What actually happens to you and the rental property will depend on what state you happen to live in.

For most, if the homeowner doesn’t pay their property tax, their property will be sold at a tax sale.

In a lot of places, they used to have these sales on the courthouse steps.

Once the sale is over and someone has purchased the property, the original owner has a certain amount of time to pay the taxes and get their property back.

How long they have will be different from state to state, but it could be as much as nine months or longer.

If you have a year’s lease, then your lease could be up before the time frame for payment is over.

During that time, you will be able to continue living on the property.

Typically, the original owner can’t evict you during that time because they don’t hold the title to the property.

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The new owner typically can’t evict you either during this time period.

It gets a little trickier as to whom you should be making rental payments while the title to the property is in flux.

Talk to your landlord, but take what they say with a grain of salt if they tell you to continue making the payments to them. 

They might not be telling you the truth and just want the money.

The best thing you can do is seek out legal counsel to help you determine not only who you should be paying rent to but also any other legal rights you may have.

If your lease is up during this time frame, your best bet would be to talk to the new owner to determine what their plans are for the property and whether you will be able to continue renting once they take full possession.

If they say you will not be able to continue to rent from them, then now is the time to start looking for a new place to move when your lease is up.

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What If Your Landlord Doesn’t Pay Their Mortgage

In a perfect world, your landlord will use your monthly rent payments to pay their mortgage payment. This typically includes any property taxes and insurance as well.

But what if they don’t?

What if your landlord has gotten themselves in a tough spot and is using their rental income to pay other debts?

If your landlord doesn’t pay their mortgage, at some point their bank or lender will foreclose on them.

If they don’t deal with the bank and make the back payments, the house will be put up for sale in a sheriff’s sale.

You may find out about this before your landlord because the sheriff will put a notice on your front door that advertises the sale. 

If this is the case, be sure to tell your landlord about the notice immediately.

So what does this mean for you?

The good news is that you do have some protection under the Protecting Tenants at Foreclosure Act.

This is a federal law that is meant to give you time to find a new place to live if it comes down to that and that you can’t be thrown out of the rental immediately.

Depending on where you live, you will have from 90 days after the sale to the end of your lease to find somewhere else to live.

If the new owner is planning on living in the home, then you will only have 90 days to find a new place. 

If your lease is longer than that, you won’t be able to stay until the end of it.

Keep in mind, after the sale your landlord no longer owns the property.

After the sale, the owner typically has six months to pay the sheriff’s sale price plus a few other costs to get their property back.

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What You Need to Do After the Sheriff’s Sale

You will want to continue making your monthly rental payments after the sale.

During this six-month period, your landlord still owns the home, so if you don’t make your monthly rental payments, you could be evicted.

If, on the other hand, the new owner has taken ownership of the property, you will need to pay them each month.

Don’t forget about your security deposit.

You should ask your landlord for your security deposit back.

You can then give it to the new landlord if they plan on allowing you to continue renting the property.

Your current landlord also has the option of transferring your security deposit to the new owner.

If this is the case, they should mail you a notice to let you know that it has been transferred.

Depending on the state, if the new owner doesn’t want to continue your lease, then you will have 90 days once the 6 month redemption period has ended to find somewhere to move.

In some states, you will be able to stay until your lease is up.

They can’t just throw you out on day one.

There is one other consideration that will determine when you have to move.

If your lease was signed before the property was transferred to its new owner you can stay until your current lease is up.

On the other hand, if it was signed after that, then you will have 90 days after the redemption period is over to move.

Also, if you are the child, spouse, or parent of the landlord then you will not have these protections and may have to move immediately and will not be able to stay until your lease term is up.

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To Sum it All Up:

Property taxes should be paid with the landlord’s monthly income. If the property owners are going through a difficult time, this might not happen. If this happens you may find yourself in a difficult position. The good news is you should be able to stay in the home for a number of months. This should give you enough time to find a new home in case the new property owner decides they want you to move, but to ensure your rights are protected, always seek legal advice if you find yourself in this situation.



Please note: This article is for informational purposes only. In no way should it be considered legal advice. Always talk to an attorney to determine your rights as a tenant.

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