If you’re leasing a home that is in the pre-foreclosure process, you may be wondering what will happen to you and your lease after the process is completed. While there is a great deal of info on the internet regarding the foreclosure process for homeowners, little is said of those renting the property. Foreclosures are unique to themselves in that there is no case-by-case procedure to follow exactly for every situation. With that said, here are some basic pointers to help clarify your unusual situation.
Luckily, in 2009, President Obama signed into action the “Protecting Tenants in Foreclosure Act.” This legislation allowed tenants to remain in their leases during and after the process, as long as their payments to the homeowner were intact. This prevented the original issue of renters being forced out of their leases without warning due to the homeowner not informing them of the foreclosure process that was occurring. Those who are on month-to-month leases are provided the opportunity to continue their lease for ninety additional days before being required to vacate the premises.
The only exception to this rule is if the new buyer intends to live on the property. In these cases, the new owner has the right to terminate the lease with a ninety day notice.
If you are unsure of your rights as a tenant of a property entering the foreclosure process, it is best to contact an attorney right away. They will be able to examine your individual case and explain your rights in full.