The foreclosure sale has taken place much to your dismay. You now are considered under the law a "holdover tenant". As a tenant, the law says the owner has to follow several steps to remove you from the property. These requirements apply whether it is the bank which takes over the property (REO) or a third party purchases the property at the foreclosure sale.
The first step is notice. In this case, the new owner is required to serve you with a "5-day notice to vacate". The gist of the notice is that if you do not vacate in 5 days they will move forward with the filing of an unlawful detainer (eviction).
Your second step is the filing, notice and holding of an unlawful detainer hearing which can generally be scheduled within 3 weeks.
Eviction or No Eviction
Many former owners, now holdover tenants, are caught off guard financially. It is not that they did not realize that the would lose their house at some point. More often the situation is that they have thrown their money at saving or delaying the foreclosure sale of the house without consideration for the financial demand that would arise when they had to move.
The biggest mistake that can be made is to decide to allow the new owner to evict them in order to buy the maximum amount of time. The error in this thinking is that the eviction judgment will appear on their credit report and is no different from being evicted for non-payment of rents to a leasing agent. In other words, the eviction judgment can hamper their ability to rent in the future.
The Cash-For-Keys Compromise
A program that is now widely embraced in this era of rampant foreclosures is the "Cash-for-Keys" program. This is primarily used by bank or mortgage lenders who have taken over ownership of a property through foreclosure (REO).
The advantage for the bank is that is is generally cheaper and faster to pay a tenant to leave than to evict them. The advantage to the holdover tenant is that if provides access to funds that are generally lacking.
How it works?
The general idea of the "Cash-For-Keys" program is that the agent for the new owner will offer money to the holdover tenant to be paid at the time of moveout. The amount offered will vary. Some companies have a sliding scale where they will pay say $3000 if you move out in 30 days. This amount may decrease with a longer delay until moveout. The going rate in the Tidewater area of Virginia is approximately $1,500.
The downside to the program from the holdover tenant's view is that the money, which may be needed for the move, is not tendered until after the moveout.
The upside for the owner is that the agreement requires that the property be left in good condition.
So if you are faced with short timeline to move after a foreclosure sale consider negotiating with your new owner. There are advantages for both parties to arrive at a compromise other than resorting to the courts.
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