In the past, when a foreclosure occurred, tenants had to move out of the property immediately. In 2009, the Protecting Tenants at Foreclosure Act was passed, which helps protect tenants in this situation. If you live in a property that is seized, you get to remain in the property at least until the end of your lease. If you are on a month-to-month rental contract, you have at least 90 days to move out of the property.
When you rent a house, you put faith in the owner of the property that it will still be available for you to rent throughout your lease. In some cases, the home you live in could be lost to a tax foreclosure. If this occurs, it can significantly impact your financial and living situations.
In some cases, you may be able to get a cash settlement in exchange for leaving the property. If the government entity that forecloses on your house does not want you in the property, you may be entitled to a cash settlement. If you take a cash settlement, you will have to move out of the property immediately. This is often done so that the house can be resold without any tenants already in place.
Problems for Tenant
In some cases, when a home is taken through a foreclosure, the tenant does not even know that the house has been foreclosed upon. Unknowingly, the tenant continues to send rent payments to the previous owner of the house. In some cases, the previous owner simply pockets the money, even though he does not provide any repairs or maintenance on the property since he no longer owns it. The government entity who forecloses on the property does not act as the landlord either, which can make life difficult on the tenant.
If you live in a house that is forfeited due to a tax liability, it can cause problems. In some cases, the house will be sold to another person or investor. If that investor wants tenants in place, you may be able to stay in the property. In other cases, you may have to look for other living arrangements once your previous lease has expired. Try to find out who owns the property so you can discuss your options.