Tenant Rights in Foreclosure

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With the current state of the real estate market and the prevalence of foreclosures in our area, it is important to know your rights as a tenant. The Protecting Tenants at Foreclosure Act became effective in 2009. It provides tenants specific rights when the home they are renting is being foreclosure upon.

Specifically, if a tenant is renting a property pursuant to a written lease agreement, and the property is sold at a foreclosure sale, there are two options. First, if the purchaser of the property at the foreclosure sale will occupy the property as their primary residence, they must provide the tenant at least ninety days to move out. The purchaser must provide the tenant with a notice to vacate at least ninety days before the effective date of such notice. On the other hand, if the purchaser of the property at the foreclosure sale is the bank, and investor, or otherwise will not occupy the property as their primary residence, they must honor the full term of the written lease agreement.

For tenants who are renting a property without a written lease agreement, or who is an at-will tenant, they must be provided with at least ninety days’ notice to vacate.

One thing to always remember is that a tenant must continue paying their rent even when the home they are renting is in foreclosure. The foreclosure proceedings do not relieve a tenant from his or her obligation to pay rent and failure to pay rent may result in eviction.

There are some exceptions to the Protecting Tenants at Foreclosure Act, so if you are a tenant in this situation, it is important to consult with an attorney to ensure that your rights are being protected. Although the trend seems to be that foreclosures are decreasing, it is important to understand your rights as a tenant in order to ensure that you and your family are protected.

Additional Resources

The full text of the Protecting Tenants at Foreclosure Act can be found at the following link: http://www.nhlp.org/files/Public%20Law%20111-22%20title%20VII%20as%20amended1%20final.pdf

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Related Topics

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If you miss too many mortgage payments, your lender can start foreclosure proceedings to take ownership of the property, but it has to follow your state's laws.

Landlord-tenant law

Landlord-tenant law is governed mostly by state laws, and covers issues like security deposit limits and deadlines, evictions, and the right to withhold rent.

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