How current events impact your business and real estate holdings

Monday, October 10, 2011

Yes, tenants must pay rent during foreclosure

While case law was established over a year ago, we consistently get

The Question: If I am in foreclosure, how can I make my tenants pay their rent?

The Answer: Bring a summary proceeding pursuant to RPAPL Article 7.

Yet, if a receiver is appointed in a foreclosure action, the receiver & not the owner should bring the action.

In General Elec. Capital Corp. v. Loretto-Utica Residential Health Care Facility, the Court held that landlord's default does not relieve tenants responsibility to pay rents.

It should be noted that some Counties, like Suffolk, require the landlord to provide notice to the tenants if they are in foreclosure. Yet, this has nothing to do with the requirement to pay rent.

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