The nice thing about renting is that you don't have to worry about foreclosure, right? Not necessarily. Many tenants have come home to see a notice of foreclosure on their front door. Of course the responsibility falls on the landlord but the situation is also stressful to renters who are unsure of what they need to do now.
Understandably, renters who receive a notice of foreclosure might question whether they need to be worried. Will they be ordered to leave? How much notice will they have? These are questions many renters have asked themselves. Fortunately, the law has provisions for people in this situation. The Protecting Tenants at Foreclosure Act which was passed in 2009 spells out the various rights that tenants have when the landlord loses the property through foreclosure.
Of all the tenants' rights spelled out in the law, two are the most important:
Tenants with a written lease cannot be ordered to vacate the property until the lease has expired. The only exception to this is if the property is purchased and the buyer intends to occupy the home. Then the tenant may be given a written notice to vacate within 90 days
Tenants without a written lease are considered month-to-month tenants but are still protected under the law. At the time of the foreclosure sale and if the buyer wishes to, tenants can be given 90 days to vacate the property
Whether the tenant has a lease or not they are guaranteed at least 90 days from the date of purchase of the property. Also, no tenant can be evicted without receiving written notice first.
Don't start packing yet
Foreclosure is often a very long process. If you've only just found out that your landlord is facing foreclosure, you don't have to start packing yet. You will want to speak to your landlord as soon as possible however to determine how far along the property is in the foreclosure process. Even when the foreclosure process is complete, the 90 day countdown doesn't begin until the property is sold.
Finally, it's important to keep in mind that you may not end up having to move out at all. While sometimes the buyer of the property intends to inhabit the home, many buyers are looking for a second property as an investment. Many of these buyers are intending to rent out the home. If you are a responsible tenant who consistently pays rent on time, it is likely that the buyer will continue to lease the property to you and become your new landlord.
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