A lease is a legally enforceable contract that outlines the relationship between a landlord and a renter/lessee. The typical lease defines all the terms involved in the rental agreement, including the duration of the lease, the manner and time of payment, and any conditions or situations that will allow either party to cancel their contractual obligations. Indiana courts evaluate the intentions of the contracting parties and will not construe the contract further than the stated terms of the agreement for either party. Coates v. Jaye, 633 N.E.2d 334, 337 [Ind. Ct. App. 1994], reh'g denied, trans, denied.
Therefore, unless your lease explicitly states you (the tenant) may terminate the agreement in the event your landlord enters into pre-foreclosure actions, you will not be able to stop paying rent or cancel the agreement. Without this explicit term in your lease, failure to pay rent under the rental agreement may be viewed as evidence of abandonment. [IC ยง 32-31-5-6]. Thus, until the foreclosure is completed against your landlord and a new owner takes possession, you will be contractually obligated to uphold the provisions of the lease. Once the unit or building you live in changes ownership, your contractual obligations to your landlord are extinguished.
You are fortunate enough to know of the possibility your landlord may lose his property. Most tenants do not discover this until the new owner notifies them, usually with the request to vacate the premises immediately. Therefore, it is likely in your best interest to begin looking for other housing in the event you are notified the building has changed owners and the new owner will not be upholding the leases between you and your current landlord. Also, because your landlord is going through foreclosure, seeking any additional legal recourse against your landlord is not advantageous given that creditors' interests will take priority over any lease agreement.
-- Michael T. Sawyier
