What are use and occupancy payments?

Use and occupancy (often called U and O) payments are amounts a Connecticut court may order a homeowner to pay in order to continue living in their property during a foreclosure action. These payments cover the fair rental value of the property and are owed to the party holding the mortgage or judgment, typically the lender or servicer.

During a foreclosure case, a court may impose use and occupancy obligations on the defendant-homeowner as part of the case management or judgment. The amount is generally based on what a neutral party would charge to rent a comparable property in the area, not the original mortgage payment. These payments must be made separately from any other mortgage or debt obligations and are a distinct court order.

Use and occupancy becomes relevant after a judgment of foreclosure is entered and the property has not yet been sold at a judicial sale. The homeowner or anyone with the right to occupy the property must continue to pay this ordered amount each month to avoid additional legal action for breach of the court order. Understanding these obligations is crucial because failure to pay can result in contempt charges or accelerate eviction proceedings. Homeowners facing foreclosure should work with an attorney to understand their specific court-ordered obligations.