What Happens To Renters During Foreclosure?
If you are renting a home and it is about to be foreclosed on, you might think that because you have a lease you will be protected from eviction. However, this is very likely not the case. Your rental home can be foreclosed on and you can be evicted. So, is there anything you can do?
In most states, the law does not protect renters whose homes are foreclosed on during the term of their lease. As long as the lease was signed after the mortgage was entered into, a lender who forecloses on the landlord can sell the home without much concern for the residents.
This does not mean, however, that the foreclosure automatically ends the rights of renters. The renters of a property, if they are living on the property at the time, still have a possessory interest in the land. This means that although a new owner of a foreclosed property legally owns that property, he or she must follow proper procedure.
This means the new owner must begin the process of eviction. While an experienced attorney can delay this process, the delay will probably only be a few days at best.
Another way to stop the eviction process is through the use of bankruptcy. Filing for bankruptcy stops the eviction process in its tracks. Even if the process was begun already, once you file, there can be no further movement in that direction.
The new owner often will ask a tenant to leave before beginning the eviction process. If you can find another place to live and do not need to wish to file for bankruptcy, moving out is probably your best option. After all, being evicted can damage your credit rating, which will make it more difficult to find a new apartment or home to rent.
Since 2009, a new federal bill has given renters of foreclosed properties more leeway. Renters who have a month-to-month lease with their landlords may continue on for 90 days before they can be formally evicted. Renters with more long-term leases are allowed to stay until the lease expires, or 90 days if an individual buyer has purchased the property.
Under the new law, a tenant will have some time to determine where next he or she will live. However, the lease will still not be honored, and the renter will probably have to leave within 90 days. The renter can sue their landlord in court, and may be able to recover the cost of finding a new apartment, including some difference in the rent, and items such as application fees and credit checks charges.
Emely Peight enjoys blogging about bankruptcy issues. For additional information or for Phoenix bankruptcy help, or if you require a Phoenix bankruptcy attorney, please visit these bankruptcy websites today.
