Is Your Foreclosure Inevitable? What You Ethically Owe Your Tenants

About a year ago we began hearing about the grief and financial loss that many renters were facing because of foreclosure .  The federal government responded by implementing rules designed to protect renters facing foreclosures such as requiring 90 days notice before renters could be evicted and forcing new owners to honor the lease of the existing tenants until they vacated the property.  But what are some of the ethical requirements landlords have towards tenants even if they are facing financial challenges?

  1. Don’t lie to existing or prospective tenants about the status of your property.  Facing foreclosure does not absolve an individual of handling their business affairs in a fair manner.  Do not tell tenants your property is in good financial standing when it is in fact in foreclosure.  And certainly don’t rent to tenants under the pretext that you are renting for 1 year when you know your foreclosure sale is scheduled two months from now.
  2. Do not cut off services such as gas, water and electricity in an effort to save money because you are facing foreclosure.  Not only is this unethical, it is illegal and could end badly for you. We know that facing foreclosure can be extremely stressful but don’t allow it to tarnish your character by doing things that may be convenient but wrong.
  3. Do not use your tenants deposit money to pay your bills just because you are facing foreclosure.  Once again, it is not only illegal it is unethical and could cause harm to the tenant.  Remember, just like you the tenant may also be facing financial problems, maybe not foreclosure but we all have our challenges in this time of difficulty.  Most tenants depend on their deposit money to move to their next home, so don’t harm them by misusing deposit money because you’re desperately trying to avoid foreclosure.