Tenant Rights During Texas Foreclosure
Foreclosures in Texas are non-judicial, meaning that a foreclosure on a property can occur without a court approval. Once the trustee auctions the property on the foreclosure date, if it does not sell at an acceptable price to the bank, the bank will retain it as their own property. The intention thereafter is to get it off of their books by selling the house. When it comes to a property that was being rented by tenants when it was foreclosed on, there are certain rights that the tenant has.
Other People Are Reading
-
The Lease
-
When a tenant signs a lease that is regulated by the Texas Real Estate Commission (TREC) it becomes legally binding on both the landlord and the tenant. Should either party default on the terms of the lease eviction can take place, or a complaint filed against the landlord. This is normally handled by the landlord and tenant, until the landlord looses the rights to the property due to foreclosure.
Time Frame
-
Once a foreclosure has been completed the bank will assign a real estate agent to evaluate occupancy of the property. Should the real estate agent conclude that the property is occupied they will report this to the assigning lender. The lender will then make the decision to begin an eviction process or do a discovery with the tenant to find out about individual circumstances. The bank can opt to extend the lease, yet this is very rare.
-
What a Foreclosure Means to a Tenant
-
Even though the tenant and landlord signed a legally binding agreement that required certain duties of both parties in order to maintain the lease, the foreclosure on a home eliminates the legal liability of the landlord. Essentially in Texas once the foreclosure has been completed the lease that was signed by the tenant is terminated.
Eviction
-
In the event that a tenant is served with a notice to vacate a property, he can appeal the decision in the court system. He can also file a temporary restraining order against the bank stating that they have no where else to go. If, when the court hears the case, the tenant is granted a temporary stay in the foreclosed home, the bank must abide by the terms and extend the original lease to the tenant.
The Sad Truth
-
The reality is that in most cases a bank wants to sell a property as quickly as possible, occupied or not. A sale of a property nets a bank more profit than continuing the terms of a lease agreement. Contesting an eviction can be costly and time consuming for the tenant. Since there are very little rights that the tenant has in the event of a foreclosure it might not be worth spending the large amounts needed to hire an attorney or file a restraining order. Since those options are the only two truly available to a tenant in Texas, it is much easier and sensible to move out when a property is foreclosed upon.
-
References
- Photo Credit for rent image by PinkShot from Fotolia.com
