What are a tenant’s rights if their rental goes into foreclosure?

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What are a tenant’s rights if their rental goes into foreclosure?

We moved into a rental home 5 months ago and found out 2 months later that it is in foreclosure. We want to know if we have 90 days to move out per the Obama law of 2009, or if we will only have days to move out after it sells? Auction date is for the end of this month. We have paid each month, but the landlord gave us a written letter 2 months ago telling us not to pay rent but instead save our money to move. Unfortunately that will still not be enough to get another place and pay all related fees/costs. That is why we are hoping that the law applies to us and will give us a little more time.

Asked on June 1, 2011 under Real Estate Law, Arizona

Answers:

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

Answered 10 years ago | Contributor

The “Protecting Tenants at Foreclosure 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.

Note:  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.


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