Tenants' Rights While Property is in Foreclosure
Landlords can have the same trouble paying their mortgage as everyone else. If your landlord doesn't pay their mortgage lender, the house or apartment building you live in might go into foreclosure. Even if it does, that doesn't mean you have to move out immediately; you may be able to stay even after the foreclosure auction, at least for a while.
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Time Frame
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Up until 2009, foreclosure often gave the mortgage lender or the new owner the right to terminate the lease and evict tenants immediately. Under 2009's federal Protecting Tenants at Foreclosure Act, you have the right to stay until your lease expires. If you're renting month to month or have a lease but the new owner wants to live in your rental unit, you have 90 days before you have to move.
Features
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Most states' laws give renters the right to a livable unit; that is, among other things, working plumbing, electricity and heating, with lockable doors and no major pest problems. You have the right to a livable apartment even if your building goes into foreclosure; however, if the mortgage lender begins collecting the rent, your landlord may decide maintenance is a waste of time. If the lender doesn't maintain the unit either, this may be a hard right to enforce.
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Geography
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Some parts of the country offer you more rights than others. In San Francisco, for example, most landlords can only evict you for "just cause," such as damaging the apartment, refusing to pay rent or using the unit for illegal purposes. Your landlord going into foreclosure or a new owner taking over the property does not constitute a just cause.
Discrimination
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Federal law bans landlords from discriminating against tenants based on race, religion, national origin and disability. Many states offer broader protections, such as banning discrimination based on sexual orientation. This applies not only to renting out an apartment, but also to discriminating by singling out particular classes of tenants for higher fees, different rules or evicting them. If your rental unit changes hands, the new owner cannot discriminate -- evicting only Muslim or Jewish tenants, for instance -- any more than the former landlord could.
Solution
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If your unit's new owner does evict you, you might be able to make a case against your former landlord in small claims court. Legally, the landlord was bound to honor your lease and make sure you have the use of your unit; failing to keep up the mortgage violates that "covenant of quiet enjoyment." You can sue for the costs of moving to a new apartment and possibly for the difference in rent if it's higher than your previous place.
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