Going into foreclosure for the owner of any kind of property is a stressful experience, but today were going focus on another person it affects; the tenant in a foreclosed property. In some ways it can be a more stressful time, for someone renting a property that goes into foreclosure. One reason is that it comes as a complete surprise usually, one day you just get a note on your door that the property is going to foreclosure. At least if you are an owner in foreclosure, you know when it is coming because you haven’t been paying your mortgage payments. All the tenant knows is that they have been paying their rent on time and now may have to find a new place to live.
If you find yourself to be a tenant of a foreclosure property, it is best to know what going to happen and what options you have. First you must know your rights; laws in each state can vary. Do some research to figure out what laws are intact for rental tenants.
Next depending on you lease-agreement you may have to play the waiting game. Meaning if you are in a long-term lease and you found out the property is going to foreclosure and being sold, you may have to wait until after it is sold, to find out what is going to happen and what the new owners decide to do. If you are not in a lease, then you can find a new place to live immediately so you won’t have to worry about it, or still continue to wait it out and see what the new owner plans on doing.
After The Rental Property Has Gone To Auction
Two things can happen when a property is in foreclosure — someone else can bid on it and buy it or no one bids on it and the it goes back to being bank owned. Either way you going be affected. Here are some options of what can happen:
– The person or bank decides to evict everyone (maybe there going to try and sell the places as condos/ or just have a different plan for the property all together)
– The new owner/bank can raise you rents or make you sign a new lease if you want to stay there.
– The new owner/bank keeps everything as is and honoring your current lease.
This is why it can be stressful for a tenant because you just don’t know which way it can go and you usually you just have to wait it out.
Depending on if you have a long-term lease and on what state you are in you have rights as a tenant. You can take the landlord to court and sue for moving costs and other damages because they could not hold up the guarantee that they signed with you. A foreclosure puts your landlord in breach of contract. Another option during the process is that you might be offered “cash for keys” in which the tenant is offered a sum of money to vacate the property before the foreclosure is completed and this is a legitimate practice. If you do not have a written lease with the landlord or management and are on a month to month agreement, you don’t have these options available.
Latest posts by ljspahr (see all)
- Steps Involved In Getting A New Mortgage - December 29, 2009
- Today I Was Forced To Serve A Five Day Eviction Notice - November 5, 2009
- The Paper Trail You Need to Follow to Defend Foreclosure - September 24, 2009