What are my legal rights as a tenant in a foreclosure?

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What are my legal rights as a tenant in a foreclosure?

We signed a 1 year lease 4 1/2 months ago. We were given by hand from mail carrier that the house in going into foreclosure and the auction is set in another 4 1/2 months. We contacted them and they agreed in writing via email to allow us to stay in the home rent free until then, possibly even 90 days after the bank takes possession. We are fine with that and plan to move. Now, their real estate agent called and wants to know if we want to buy the home on a short sale. This was not the plan and we feel the owners are being underhanded and trying to just “save their credit”.

Asked on August 19, 2011 Idaho

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

There was a federal law passed last year where tenants in a month-to-month lease on property foreclosed upon have at least ninety days written notice to vacate the property from the new owner who acquires the property at a trustee's sale. If the lease is more than a month-to-month and there is a term remaining on the lease, the tenants have until the lease's term ends to remain in the property assuming rent is current.

If you want to buy the property from the current owners on a "short sale" you can explore the possibility as to price and terms. The lending institutions holding the secured loans on the distressed property have to approve the terms of the sale in writing in a "short sale addendum" because the sales price will be less than what is owed on the secured loans.

Good luck.


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