This installment of “Ask Nick” with Fortune Title Agency President Nicholas Timpanaro deals with tenants’ rights if the residence they are renting falls into foreclosure before their lease expires.
Question: Our search on the property found a recorded Residential Lease Agreement, executed in 2019, for a term of 60 months. Is this lease valid if the foreclosure Lis Pendens was filed prior to the lease being signed? Or does the agreement hold merit because the borrower was still in possession until the deed was recorded subsequent to the lease? Must this property sell in REO and be subject to the rights of the tenant pursuant to the Residential Lease Agreement?
Nick’s Answer: The Residential Lease could present a potential issue, so it should be announced at sale in REO to a purchaser. New Jersey has very strict tenant/landlord laws that protect tenants. Therefore, the lease is very much an issue, even though it was done after the filing of the Lis Pendens.
We hope this Ask Nick is helpful to your work. If you have a question you’d like to Ask Nick, please email Nick.Timpanaro@fortunetitle.com.
Ask Nick is for informational purposes only. Under no circumstances is Fortune Title Agency, Inc. or any of its employees giving any legal advice in this newsletter. Always contact your attorney for any legal advice.