Q. In the state of Maine, what is the law regarding tenants’ rights in a foreclosure situation? Does foreclosure action make eviction automatic? And does it make a difference whether the building foreclosed on is a several-unit apartment house or a single-family home that has been rented out?
A. The answers are different for tenants than for owners, and they’re usually different depending on whether the owner’s mortgage is residential or commercial. Already you can see that there are a lot of potential variations. All we can do here is offer some generalities and typical outcomes.
Maine property owners can typically be ousted from their property once the foreclosure judgment is 90 days old. Foreclosure judgments usually give the bank the right to get a writ of possession against the owners without having to run a separate eviction case.
But that right does not extend against anyone except the mortgagor. If the lender wants to oust anybody else — such as the mortgagor’s tenants — it needs to start an eviction, beginning with notice to quit, followed by service of a complaint and obtaining judgment at court.
The bank can do that only if it is the owner of the property, which means after a foreclosure auction at which the bank is the high bidder, or if the mortgage gives the bank the right to evict tenants once the mortgage is in default. Commercial mortgages typically include that right. Residential mortgages, which usually apply if somebody is renting out his own house, may not.
Looking at that same situation from the other side, the bank cannot start an eviction against anybody until 90 days after the foreclosure judgment enters unless the mortgage says otherwise. Before that time, unless the mortgage says otherwise, only the owner or landlord can start an eviction.
On a related point, the right to skip the eviction process and jump straight to the writ of possession after a foreclosure belongs only to the bank. People who buy foreclosed property, whether a single unit or large commercial property, need to start from scratch with notice and eviction process after their purchase is complete.
It’s hard to avoid sounding like a lawyer with this one, but the answers really do depend on some specific things that will differ from case to case. An answer that tells you your legal options requires a clear understanding of the facts of your particular situation, grounded in a detailed review of the mortgage and the foreclosure judgment. Consulting an attorney and knowing the facts (instead of assuming them) really pays off in these situations.
This column is a service of the Lawyer Referral and Information Service of the Maine State Bar Association. Its contents are a general response to the question and do not constitute legal advice. Questions are welcome. E-mail AAL@mainebar.org, describe your question and note you are a BDN reader. Written questions mailed to “Ask a Lawyer,” Bangor Daily News, P.O. Box 1329, Bangor, Maine, 04402-1329 will be forwarded to the LRIS.