If a Mortgagee Takes Possession

If a mortgagee, such as a bank or financial institution, is entitled to take possession of the premises they can give written notice to end the tenancy.

This may happen if the premises are subject to a mortgage, the owner breaches the mortgage obligations, and they owner did not receive prior consent for your tenancy from the mortgagee.

The mortgagee must give you a Notice to Vacate from Mortgagee to Tenant (or Mortgagee to Resident) form. In residential tenancies, you must be given at least 2 months notice. In rooming accommodation, you must be given at least 30 days notice.

You can be given this notice whether you have a periodic agreement or a fixed term agreement.

If you receive a Notice to Vacate from Mortgagee to Tenant/Resident you can move out on or before the handover day on the notice. If you get this notice and move out you are not liable to your former lessor or provider for any loss or expense they incur because you’ve moved out. You should advise the mortgagee of the date you intend to vacate and make arrangements to return the keys.

In some situations, a mortgagee may give you written notice to pay rent directly to them, instead of to the lessor, agent or provider. If you pay rent to the mortgagee, you are not liable to your lessor, agent or provider for any loss or expense they incur as a result.

Paying rent to the mortgagee does not indicate they consent to your tenancy. If you want to remain in the premises you could approach the mortgagee and see if they will enter into a tenancy agreement with you. They do not have to agree to this.

When you receive Notice to Vacate from a mortgagee you can contact the RTA to seek a refund of your bond. You will need to send the RTA a Refund of Rental Bond form and copies of the Notice to Vacate and correspondence from the mortgagee.

If you have a fixed term agreement and have to move out you can also seek compensation from your former lessor or provider. Mortgagee in possession situations can be complex and you may wish to seek assistance from a tenant advice service.