What do I do if the house I'm renting in Washington is sold in a foreclosure?
Is the foreclosure sale valid?
- First of all, RCW 61.24.040 requires that the notice of foreclosure sale (at least 90 days prior to the sale date) be posted in a conspicuous place on the property or be served on the occupants of the property. If the trustee cannot prove that the notice was properly posted on the property or served on you, then you may have a claim that the foreclosure action is ineffective as to you and all tenants and occupants whom the trustee did not properly post/serve.
Has the proper vacate notice been served?
- If the notice was properly posted or served, then federal law (Protecting Tenants of Foreclosure Act of 2009) provides you with a minimum of 90 days after notice from the BUYER in which to move. See link below. Alternatively, Washington law provides you with a minimum of 60 days after the sale in which to move. See RCW 61.24.146, linked below.
Are there any applicable exceptions to the 90/60 day notice protections?
- There are a few exceptions to the 90 day notice required by federal law. You don't get the protection if you are not a "bona fide" tenant (for example, the sister of the foreclosed-on owner. See the federal act, linked below, for more details if you think the bona fide tenant exception may apply to you); if the mortgage being foreclosed on is not a federally-regulated mortgage (this is not common); or if you are the former owner. Also, you do not get the protection of the Washington 60-day notice if you commit waste (damage the property).
What if I have a lease that is longer than the 90 day period?
- If you have a written lease that doesn't expire until well after the sale (i.e. more than 90 days), then you have a right under federal law to stay until the end of your lease term, as long as you keep paying your rent, except in situations where the new owner is going to personally occupy the home.
What if a "new lender" is the one doing the foreclosure?
- Also, if the lender who is foreclosing made their loan after you signed your lease (this is unlikely) then their foreclosure will not affect your lease rights.
What if the sale was a market sale, a "short sale" or "deed in lieu", instead of a public auction?
- Keep in mind that if the house is simply sold privately in a market sale or "short sale" (as opposed to a public foreclosure auction), the federal and state laws providing 90/60 days to move do not apply, but the good news is that the private sale does not cancel your lease, so you will continue to have whatever rights with the new landlord that you had with the old landlord. If your landlord simply turned the keys over to the bank (called a "deed in lieu of foreclosure"), it is unclear whether the new owner, the bank, would be required to give the federal and state notices.
How long do I have to move, once the notice period is over?
- If the new owner properly serves a 90 or 60 day notice on you and you have not moved out by the end of the notice period, then the new owner may start an eviction action against you. Once you have been served with the eviction summons and complaint, the eviction action can take as little as 8-9 days before the sheriff's eviction notice is posted on your door (although it could be a little longer, depending on how fast the landlord's attorney gets the papers filed and how long it takes the sheriff to post the notice). The sheriff's notice will then give you three additional days in which to vacate.
Can I negotiate a lease or rental arrangement with the new owner?
- Oftentimes, yes. Because the new owner wants to avoid the hassles and expense of serving the proper notices and pursuing an eviction action, not to mention the risk of having his new property damaged or neglected by a disgruntled tenant, the new owner is sometimes willing to negotiate different move-out timelines, payment of moving expenses, or new leases. Remember that the new owner, if she is intending to use the property as a rental, may very well want to keep you as a tenant (especially if you have been diligent in payment of rent) rather than have a vacant property. This is sometimes the case even if the new owner wants to sell the property, but anticipates it may be on the market a while.
Should I have an attorney review my case?
- Every case is different, and the above guide contains very general principles, so you should always seek the advice of an attorney to determine exactly how long you have before you can expect to be evicted, and what sort of terms you may be able to negotiate with the new owner.