May a Housing Authority Refuse to Authorize a Rental Home That is in Foreclosure
My question involves landlord-tenant law in the State of: Illinois
I have a rental in pre-foreclosure. I'm trying to work out a loan modification. Even if it forecloses it may be two years before the sheriff sale. I have a potential tenant with a housing authority who applied to lease the property but the housing authority is refusing to contract with me because of the status of the property. Is this legal, are there discrimination issues going on here? Can I take any legal action?
Re: Housing Authority and Foreclosure
You are asking if the Housing Authority can refuse to contract with you. Yes they can.
There is likely a Lis pendense on file with the county.
Quote:
“Lis pendens” is latin for “suit pending.” The notice of lis pendens is recorded in the county land records and then a copy is served to the borrower, along with the complaint and summons. The purpose of the notice of lis pendens is to inform the public that a lawsuit involving the property is pending. The notice of lis pendens is typically a one- or two-page document that includes the legal description of the property and states that a foreclosure has been initiated.
There is no discrimination. The action you can take is to pay up on the mortgage.
Re: Housing Authority and Foreclosure
What do you mean that the housing authority refused based on the “status of the property”? What exactly was it that caused the housing authority to decline the lease? Has a foreclosure suit actually been filed? The lis pendens that budwad referred to should not be filed prior to the filing of a foreclosure lawsuit. In any event, if the status that is causing the housing authority to decline the lease is that your lender has started the foreclosure process, that is not illegal discrimination and there is no legal recourse for you there. The housing authority has a justified concern, after all: it does not want the qualifying tenant to be kicked out during the lease term or face other problems because of the foreclosure.
Re: Housing Authority and Foreclosure
I'm assuming your prospective tenant is on section 8 or a similar HUD program.
My understanding is section 8 agencies have very specific regs about which properties they are willing to certify to accept section 8.
If you want to find out more, you can look on the HUD website for the federal regulations or look on the website of the housing authority for more specific policies. Or you can try calling them and ask them to point you towards their written policy on this.
I would suspect that their denial was valid, but you should have the right to appeal the decision if you wish or if you find a policy was broken.
By the time you appeal, your tenant will probably have found other housing, though. You are probably better off just finding a new tenant.
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I am not a lawyer, but I agree with the posters above. I don't think there are any discrimination or legal issues here - in what you have written so far.