Legal Question in Real Estate Law in Massachusetts
vacation rental lease & foreclosure
Are leases for weekly rentals still in effect if a property is foreclosed prior to the tenancy. Do I need any special language in my leases to ensure my tenants are not left with a void lease?
2 Answers from Attorneys
Re: vacation rental lease & foreclosure
If you don't own the property (ie. if it has been foreclosed), then you cannot lease it to someone since you do not have the right to control or use property that belongs to someone else 9i. the lender).
Re: vacation rental lease & foreclosure
If a property is in foreclosure, it is doubtful that the owner would be on sound footing to lease out the property, at least without a disclaimer and without putting rents in escrow. Conceivably, the lessees could go after the lessor for an unfair trade practice.
However, it would make sense to look at the terms of the mortgage - what does the mortgage permit and require with respect to leases? In some cases, the lender will recognize the lease, as long as the lease does not allow the lessee to go after the lender in any way, including to recoup rental payments or recover for injuries not directly caused by the lender.
Still, I would be doubtful...
This is a question best answered in direct consultation with an attorney.
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