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I recently moved into a rental home and have information that they are in search of the home owner to serve papers for foreclosure. Since I have limited finances, I wonder what to expect next or how long will the process take if they cant seem to find the owner? Will I come home one day and find myself locked out? Not sure what to do. Ugh!
"Before President Obama signed the "Protecting Tenants at Foreclosure Act of 2009," most renters lost their leases upon foreclosure. But this legislation provided that leases would survive a foreclosure. The tenant could stay at least until the end of the lease, and month-to-month tenants would be entitled to 90 days' notice before having to move out (this notice period is longer than any state's non-foreclosure notice period, a real boon to tenants).
An exception was carved out for the buyer who intends to live on the property -- this buyer may terminate a lease with 90 days' notice. Importantly, the law provides that any state legislation that is more generous to tenants will not be preempted by the federal law. These protections apply to Section 8 tenants, too.
Importantly, tenants who live in cities with rent control "just cause" eviction protection are also protected from terminations at the hands of an acquiring bank or new owner. These tenants can rely on their ordinance's list of allowable, or "just causes," for termination. Because a change of ownership, without more, does not justify a termination, the fact that the change occurred through foreclosure will not justify a termination."
Worst case scenario. The house will be classified as abandoned, a locksmith will be hired and clean out company will be hired to throw away everything in the house. You will come home to a locked house with nothing in it. All of your belongings will be at the dump. Is it legal? No. Does it happen? Yep.... happens all the time.
Worst case scenario. The house will be classified as abandoned, a locksmith will be hired and clean out company will be hired to throw away everything in the house. You will come home to a locked house with nothing in it. All of your belongings will be at the dump. Is it legal? No. Does it happen? Yep.... happens all the time.
I've never heard of this happening in my area, and I work in a real estate/property management office, so I hear all the horror stories. So maybe it happens a lot in some areas, but not everywhere. If that did happen, you would be a shoe in to win a lawsuit against the new owner.
In my area, the more likely prospect is as follows:
The property will be served, which results in a 120 day clock to start ticking before the foreclosure can take place.
The foreclosure will likely be delayed at least once and possibly a few times.
Once the sale actually takes place, the new owner will likely either not know your rights or pretend not to know, and try to bully you into moving out immediately. You legally have the right to receive 90 days notice if the new owner wants to take occupancy, and 90 days notice or through the duration of your lease if you are in a longer lease, if the new owner is the bank or an investor. If the new owner wants you out sooner, they can make a cash offer to persuade you to agree to move sooner. You can choose to accept that or not.
****Important note: Currently, the Protecting Tenants at Foreclosure Act is only in effect until December 31st, 2014, so if the house forecloses after that, you will have to hope they extend it again or you will not be covered.
If I were renting a house going into foreclosure and had limited funds, I'm not sure I'd continue paying rent... I might save up. Not that it would be right.... but this would be a hard situation... not knowing when you would have to leave. Or even if your stuff will be there when you return.
While I'm sure there are legal protections, I'm sure some mixups happened and some innocent renters had their stuff on the street.
If I were renting a house going into foreclosure and had limited funds, I'm not sure I'd continue paying rent... I might save up.
The landlord can still evict you, and sue you for the back rent, up until the day the bank forecloses on him. Even then, he can still sue you for the rent you owed while he owned it.
I know in Missouri, and probably elsewhere, when they notify the owners of the pending sale, notice is also sent to "current residents" of whatever address (which would be you). When I got that notice I'd make sure to contact the foreclosing bank and make them aware you just renting. Offer to send a copy of the lease. i'd even think about putting a sign on the front door saying the same. Couldn't hurt.
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