The Surreal Estate

Perspectives on Tenant Organizing from the Urban Homesteading Assistance Board

What Happens During a Multi-Family Foreclosure in NYC?

What happens when a building goes into foreclosure? Will tenants be evicted? Who should tenants pay? What rights do tenants have during the process? As organizers working mainly in multi-family, rent-stabilized buildings, we get these questions all the time. This is why we made a flow chart and Q+A fact sheet for tenants and advocates to better understand the foreclosure process and possible outcomes.  (The flow chart is located in our “resources tab” on the top right side of this page.)

Of course, there is no set formula as to how exactly a foreclosure will play out.  Some buildings will go through the process within a couple of months, and others will languish in foreclosure for years and years.  Court-appointed receivers are placed in buildings during the foreclosure process to collect rents, make repairs, issue new leases, and rent out apartments.  Sometimes, buildings are never appointed receivers and tenants continue to pay their landlord until the case is completed.  All to often, the court appoints a receiver who simply never shows up.

Foreclosure can be difficult for tenants, particularly because it is often paired with confusion about who to pay, who is responsible for repairs, and more often than not, tenants see a decline in services.  Still, if tenants know their rights and work together, they not only increase their chances of improving building conditions, but also can have a voice in the final outcome.  Tenants are the ones who live in the building, so shouldn’t they be the ones with the most decision-making power regarding what happens to their home?

At UHAB, we believe a successful final outcome of a multi-family foreclosure as one that the tenants choose. Tenants deserve to have a say in who the next owner of their building is, whether it be a tenant-approved developer or the tenants themselves.  On the other hand, a poor outcome in the foreclosure would be a new landlord sweeping in, raising the debt  to an unsustainable level, and with no interest in working with tenants.  Our goal as organizers is to work with tenants to ensure this doesn’t happen.  We hope that as tenants continue to form strong tenant associations and have a voice in the foreclosure process, they will contribute to the preservation of high-quality, permanently affordable buildings.

-To check out our brochure about what happens during a multi-family foreclosure, click here. The brochure is in both English and Spanish.

PLUS, here is Legal Aid Society’s booklet outlining tenant’s rights during a foreclosure.

If your building is in foreclosure, or you have any questions, please contact us at thesurrealestate@gmail.com.

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