What can we do if out rental is in foreclosure?

We’ve been renting a house for 9 months. About 4 months ago, we received multiple letters for the owners and occupants (us being the tenant) that stated the house was going into foreclosure. We’ve asked our landlord and she kept telling us that they are just trying to transfer the house from her brother’s name to her dad’s name but that the bank is just telling her to wait to see if it’s approved or not but told us not to worry. I found out through a friend that there house was going to be put up for auction and starter to find out what I could on my own and did find that the house was going for auction last week. Can we get our money back? And how long can we stay as we had a year lease.

Asked on January 9, 2013 under Real Estate Law, Georgia


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

As a tenant, you are still liable to pay rent to your landlord until title to the property passes. Exactly when that is can vary depending on the state but certainly the latest it happpens is at such time as the property is old at auction. After that time, you still owe rent since you're living on the premises but you owe it to the new owner, not the original landlord.

You should be aware that federal law gives some rights and protection in such a situation. When a home goes into foreclosure, tenants who have a written lease can continue to occupy the home until the end of the lease period, or 90 days, whichever is longer. The only exception would be if the new owner intends to move in and occupy the home as their primary residence. In that case, a 90 day notice to move would apply. Those tenants with a month-to-month lease, or no lease at all, have to be given at least 90 days notice to move. Additionally, in cases where state law provides more protection than the federal law, the state law applies.

Finally, your original landlord is responsible for the return of your security depoit, not the new owner.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.