With the increase in the number of foreclosures over the past few years, it is not only homeowners who are feeling the effects. Many foreclosed properties are not the primary residences of the property owner but instead are rental properties. Receiving a notice that your home is the subject of a foreclosure action can be a frightening thing. Often tenants think that if their home is getting foreclosed, they will be forced to move out right away. Here are a few things that tenants should know:
1. Foreclosures take time
Even if your landlord chooses not to contest the foreclosure, you will still have some time before the foreclosure process is complete. Florida is a judicial foreclosure state, which means that in order to foreclose, the lender must obtain a judgment in court. This involves filing and serving the foreclosure complaint, waiting for the property owner to default, obtaining a default judgment from the court, obtaining a date for the foreclosure sale, publishing all the required notices for the sale, holding the sale, and issuing a certificate of sale and certificate of title. This process can take several months. If your landlord chooses to fight the foreclosure, the process can take several years before it is concluded. If you are served with a foreclosure complaint for your residence, you should file an answer explaining:
You do not own the property that is being foreclosed; and
You live in the property and are playing rent.
You should attach a copy of your lease to the answer. This will put the lender on notice that there is a tenant living in the property. It will also ensure that you receive notices on what is happening in the foreclosure action.
2. You still are responsible for your rent
If you are notified that your home is the subject of a foreclosure action, it may be tempting to stop paying rent to your landlord. It is very important that you do not follow through with this temptation. As long as your landlord is the owner of your home, he is entitled to receive rent from you according to the terms of your lease. If you stop paying rent, your landlord can evict you. The fact that the property is going through a foreclosure is not a defense to nonpayment of rent.
3. Even if your home is sold through foreclosure, you still have rights
The foreclosure process has been completed, and you now have a new landlord. You may be concerned that the new landlord can summarily evict you even if you have been complying with the terms of your lease. Fortunately, there is federal legislation that prevents this from happening. The Protecting Tenants in Foreclosure Act of 2009 was enacted to protect tenants whose homes have been foreclosed. Under the Act, a person who acquires a property through foreclosure may not require any tenants living on the property to move until the end of their lease or for 90 days, whichever is longer. The only exception to this rule is that if a new owner wishes to use the property as a primary residence, they may require the tenants to vacate the property on 90 days notice, even if there is more time remaining on the lease.