What are my rights if I’m renting a house that might be foreclosed on?

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What are my rights if I’m renting a house that might be foreclosed on?

I am renting a house through a realtor. The owner of the house, has defaulted on payments and we are getting letters from her mortgage company. If the house is foreclosed on can they make us move before our lease is up?

Asked on July 12, 2012 under Real Estate Law, Tennessee

Answers:

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

Answered 8 years ago | Contributor

Federal law gives some rights and protection to a tenant in the event that their rental is foreclosed upon. Legally, 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 period is longer (unless 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). Tenants who have a month-to-month lease or no lease, have to be given at least 90 days notice to move.

However, even if a foreclosure action has already been filed, as long as the landlord remains on the title to the property, a tenant must continue paying rent to them. In some jurisdictions, a tenant may be able to pay their rent to the local clerk of courts, who will deposit the money into a special account. Consequently, the tenant must be careful to find out just when title to the property passes. 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 such  time, the landlord will no longer be the legal owner and the tenant will be informed where to send their rent. Finally, if you paid a security deposit, the original landlord is reponsible for its return.


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