It is a sad reality in today's market that many times unsuspecting tenants can be caught unawares by their landlord's failure to pay their mortgage. This guide helps tenants understand the law and their rights in Washington State.
Life before the foreclosure sale. "I just received a notice of foreclosure sale, can I stop paying rent?"
Your obligation to pay rent doesn't stop because your landlord isn't using that money to pay their mortgage. It may seem unfair, but if you choose to stop paying your rent your landlord can act to evict you.
"What happens to my security deposit?"
Second, your landlord will remain responsible for the security deposit. If he does not transfer it to the new owner or return it to you, you will need to sue him in small claims court. RCW 59.18.285 allows you to recover two times the deposit amount if the landlord wrongfully withholds it. A small claims court guide is listed in the links below.
Life after the foreclosure sale. "Do I have to move out after the foreclosure?"
Washington State and Federal law both provide protections for tenants who are caught up in the foreclosure process. Washington State RCW 61.24.160 requires that tenants receive 60 days notice to vacate after the sale occurs. Federal law requires 90 days notice to a bona fide tenant (not related to the foreclosed owner, a close friend, or paying less than market rate for rent, this doesn't include government subsidized rent reductions). If you have a lease for a set term AND the buyer is not looking to move into the house (ie. a bank bought the house at auction) the Federal law allows you to complete your rental term set forth in the lease. Once the sale has completed it is important that you contact the new owner in writing and assert your rights as a tenant.
Rent after the foreclosure sale. "Who do I pay rent to?"
This is an important question. After the foreclosure sale you will get notice of who the new owner is going to be. Be aware that some scammers have started calling tenants and demanding rent, go online and check the property records to see who is listed in the Foreclosure Sale as the buyer. After the sale occurs, you should no longer give your money to the old landlord or their property management company. The Federal 90-day law requires that you pay your rent to the new owner. The State 60 day law does not have the same requirement. Whether the new owner wishes to take on the new responsibility of collecting rent or simply is waiting to take possession of the property is up to the new owner. You should speak to an attorney before making a decision to stop paying rent.
Additional protections in Seattle. "I'm so happy I rent in Fremont / Ballard / Capital Hill!"
For those residing within the Seattle city limits there are possibly more protections available to you. The Seattle Municipal Ordinance states that evictions can only be brought for just cause reasons listed in the ordinance. The buying of a foreclosure property, is not one of the just cause reasons listed in the ordinance. If you live in Seattle you should contact a local attorney to discuss your matter in more detail.
Additional resources provided by the author
This guide has been written for informational purposes only. Your individual case may have issues that fall outside the scope of this guide. Nothing can replace the importance of having a skilled attorney representing your interests. Please contact an attorney if you have any questions about your legal matter.
Below are some links to additional resources that you may find helpful.
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