What can we do if out rental is in foreclosure?
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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
Answers:
M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney
Answered 11 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.
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