Tenant Rights Regarding a Foreclosed Rental
With the increase in foreclosures in recent years, it has become necessary for the government to clarify issues regarding renters' rights. In May of 2009, new federal legislation addressed the issue and codified the rights renters have when a bank takes over a home through foreclosure.
Other People Are Reading
-
Banks and Tenants
-
When banks foreclose on a house they have tended to evict any tenants, thinking apparently that it will make the house easier to sell. This is not always the case, but prior to May 2009, that was pretty much standard practice. But then a new federal law was passed called the "Protecting Tenants at Foreclosure Act of 2009." This law stated that leases survive foreclosure. In other words, even though the landlord might be a bank, the tenant's right to occupy the property remains intact.
Exceptions
-
One exception is if the house is to be occupied by a new owner. In that case, the new owner could give the tenant 90 days' notice and the tenant would have to move out. In the case of a month-to-month lease, the tenant still would get 90 days' notice.
-
Paying Rent
-
If your rental home is foreclosed on, your landlord will change, but that does not relieve you of the responsibility of paying rent. You must continue to pay your rent or risk being evicted. You should be contacted by the new owner to establish the new method and location of payment.
Typical Problems
-
Unfortunately, during the transition period when the bank is in the process of foreclosing, a variety of issues can arise. The landlord may stop maintaining the property. If he can't pay his mortgage and is going to lose it anyway, he has little motivation to maintain it. The landlord may not even notify you of the impending foreclosure. Under these circumstances, tenants may have additional rights based on state law. You may need to contact a local lawyer to find out what your rights are in these cases.
-
References
- Photo Credit hipoteca image by juanjo tugores from Fotolia.com
