Renters' Rights & REO in Florida
Since the real estate peak of 2006 and its subsequent crash, the number of Americans facing foreclosure is at an all-time high. REO is an acronym for "Real Estate Owned" and refers to properties that are owned/have been repossessed by the lender. Homeowners are not the only ones affected by foreclosures, though; there are many renters (often renting from investors) who find themselves on the verge of eviction because their landlords are facing foreclosure. Tenants are not without rights, though.
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The Foreclosure Process
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If you are renting a property that you have discovered is in process of being foreclosed upon, you will, most likely, have to move. The good news is that the earlier you find out about the process, the longer you will have to find a new home. In the foreclosure process, the bank first notifies the mortgage holder that he is behind in his payments. The bank must file paperwork and proceed with taking over ownership of the property, which can take months. Once the bank has completed its work, it can hold a property auction. After the auction, renters will be served notice by a sheriff's office that they must vacate (an eviction notice). If you find out earlier in the process (the Lis Pendens stage), you can ask the court to delay the process to allow you more time.
New Laws that Affect Rights
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The Protecting Tenants at Foreclosure Act of 2009 was a law passed in response to the massive rise in foreclosure rates. The act lengthens the amount of time between auction and eviction. Under this law, tenants have 90 days, not a few weeks, to find a new home. If there a lease in place, they are permitted to finish out their lease plus take up to 90 days to find a new home.
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The Bottom Line
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In essence, tenants must continue to follow their leases, even if the property is in foreclosure. The tenants can contact the bank's attorney (listed on the papers posted/delivered by the sheriff's office) to get information and advice; the attorney is bound by law to adhere to the Protecting Tenants at Foreclosure Act of 2009.
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