Q. My landlord has fallen behind on paying his mortgage and it looks like the bank is foreclosing. He is demanding rent from me, but obviously not using it to pay his obligations to the bank. Should I continue to pay him the rent?

A. It really depends. One way of looking at things is that it isn't any of your business what the landlord and the bank are doing, your agreement calls upon you to pay the rent and that is what you should do. But another way of looking at it is in the form of an anticipatory breach of contract. Perhaps the lease between you is for a year, and you are only a month or two into it. If the foreclosure action is nearing its conclusion, then the Court is going to sell the property pretty soon at a Sheriff's Auction and the new owner will not be bound by the lease agreement you have with the landlord and can kick you out. As such, you will be looking for a new place to live, with moving expenses and new security deposit and first month's rent costs, etc. As such, it would be understandable if you wanted to defray these costs improperly and illegally dumped upon you by the landlord in default.

If you are nearing the end of your lease and the foreclosure is in its very early stages, you may want to pay your rent as the landlord will not have breached the lease by interrupting your possession (through his non-payment of the mortgage) prior to your lease ending. This will also keep your record clear of any evictions which might be filed against you.

But if the lease still has a long time to run, and the property is about to be sold in the next few months, you would be far better off putting your rent into a bank account somewhere and using it to offset the costs of your move to your next apartment and to get your security deposit back (good luck collecting on a judgment against a landlord who can't pay his mortgage and is soon to be without property). You also may be able to contract with the new owner if you can find out who that is and start paying the rent to that person. A landlord in this situation may be unlikely to file an eviction since those cost money in filing and legal fees that the landlord likely does not have.

If the landlord does file an eviction action against you, you can argue that he is not paying his mortgage, that the property is about to change hands and that you will suffer damages by way of interruption of possession due to the landlord's failure to pay the mortgage, and that because eviction is an equitable remedy, the landlord's inequitable conduct in not paying his mortgage and causing your imminent displacement should bar him from the equitable remedy he/she seeks, that of eviction against you.

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Disclaimer: The information provided on ohiolandlordtenant.com is not intended to be legal advice, but general information related to legal issues commonly encountered. The law in your state may be different from that discussed here. The facts in your case may be different too.

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