Landlords, leases and foreclosures

Question: Is it ethical for a landlord to sign a one-year lease when he knows the property may be foreclosed?

Answer: Whether it’s “ethical” for a landlord to act as you describe is a matter for the landlord and his conscience -- and maybe his apartment association -- to figure out. If you want to know whether it’s legal, however, the answer is clearer. Let’s consider a landlord who signs a lease knowing that the property may be foreclosed upon during the lease term. The more likely it is that foreclosure will happen -- if the landlord has already received notice of foreclosure, for example -- the more likely it is fraud, because the landlord is promising to do something (make the premises available for a year) that he reasonably knows he cannot do. At the other end of the spectrum, a landlord who is merely worrying about a remote possibility that he won’t be able to meet his mortgage probably doesn’t have a duty to disclose this worry.

-- Janet Portman, Inman News

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E-mail Janet Portman at janet@inman.com.