IfI sign a residential lease and the property goes into foreclosure, canI be evicted before the term of the lease is up?

UPDATED: Apr 21, 2011

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IfI sign a residential lease and the property goes into foreclosure, canI be evicted before the term of the lease is up?

How would the the Protecting Tenants at Foreclosure Act of 2009 effect this? What if the lease has a subordination of lease clause?

Asked on April 21, 2011 under Real Estate Law, Florida


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

Answered 11 years ago | Contributor

A lease subordination clause basically gives the lender the right to evict tenants on the property in the event of a foreclosure.  The clause does not kick in until such time that the mortgage holder acquires title to the property. Generally, this happens after the property has been auctioned at the county courthouse. 

However, pursuant to the Protecting Tenants in Foreclosure Act, tenants are given protection protection to a tenant in the event that their rental unit is foreclosed upon. The Act requires that 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.

You should be aware however, even if a foreclosure action has already been filed, as long as the landlord remains the owner of record that (is still on the title to the property), it must continue to pay rent to their lanlord.  As a lawful occupant of a property in foreclosure, a tenant should be notified by the mortgage lender as to the sale/transfer date of the property.  After this time, the landlord will no longer be the legal owner. A tenant should then be informed where to send their rental payments by the new owner.

One bright spot in all of this is that sometimes an incentive can be negotiated between a new owner and a tenant so that the tenant agrees to move out prior to the end of their lease, or 90, which ever applies.  This incentive is known as “Cash for Keys”. Basically, the owner will pay a tenant to leave the property early in exchange for a cash payment.  The amount and timing of the payment can be worked out on a case-by-case basis.

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.

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