Many Property Managers of single family homes, condominiums or other rental units will at some point in their career cross paths with a Property Owner who has not paid taxes and there is a tax lien on the property. Such a situation may cause the Tenant, the Property Owner and the Property Manager significant stress.        

NO LEASE BREAK RIGHTS 

The Tenant may be served with a foreclosure lawsuit and other subsequent court documents filed in the foreclosure proceeding and may be spooked. 

As long as the Property Owner remains the titleholder, the Tenant needs to pay rent and honor the lease.  The Property Owner in default can evict the tenant for defaulting on the lease terms. The Tenant does not have a right to stop paying rent or terminate the lease early simply by virtue of the lien or foreclosure action being filed BUT some judges may feel otherwise.           

ACTIONS TO BE TAKEN  

1. If you decide to manage the property, you should get permission from the Property Owner to disclose the lien to the Tenant.

2. The Tenant should sign the form we provide where the Tenant is notified of the tax lien and is deciding to rent the property nonetheless.

3. Many Property Managers charge the Property Owner a higher commission in this circumstance as further problems and hassle may arise.

4. The Property Manager needs to be prepared for the Property Owner to potentially not pay for repairs if they are in a financial bind.

“Serving the Property Management Professional”

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