When a Rental is Foreclosed On...

[flip_it_fast]

Did you know that if you are under a rental contract and the property becomes foreclosed upon the lender has to honor the agreement? Most people don't know that.

Many times lenders will try to scare people and get them to move out before their contract is up so that they can begin the process of re-selling the property.

Under the Protecting Tenants at Foreclosure Act, which Congress passed last May, tenants like Pearson are usually eligible to stay after the property has been foreclosed as long as they have a valid lease and are paying their rent regularly. Even renters on a month-to-month lease get 90 days to leave.

cnnmoney

One letter sent out by a Texas law firm stated, "This letter constitutes formal and final demand that you vacate the premises within three days [emphasis ours] of the date this letter is delivered."
Worse, the message threatens legal costs if tenants don't comply. With that facing them, many fold their tents.
"The average person wouldn't know the law has changed," said Robert Doggett, an attorney for Texas RioGrande Legal Aid. "People assume they have to leave."

cnn money

That would have me worried as well. No wonder people get all upset.

They need to make all lenders aware of the law and there should be a stiff penalty if the law isn't followed.

[troubles74]

This happens to be one of the few things that our government and state has done a pretty good job on.It is true when a lease agreement is in place,the new owners have to follow through on the agreement that you and your previos landlord had written up.

Once the lease agreement runs out,then the new owners have the opportunity to either fill out a new lease agreement between themselves and the tenant,or then they can give you a notice and make you move out.

[flip_it_fast]

I agree with you. This is a good law that the government put into place. It surely isn't fair for someone who has paid their rent regularly to be thrown out without much of a notice, especially when they have a contract. Yet lenders try to do this very thing all the time. They try to say that the contract wasn't legal and such and some people believe them. It's a real shame.

[Eyeofngt]

That is good to know, essp. because i do rent my house. I have heard of people getting letters just like that and the tenants do not know thier rights. So they get scared and move out.

This should be put in every lease there is so the tenamts know thier rights.

[flip_it_fast]

I found out a bit more on this topic.

Even in a situation where the rental house is foreclosed on and the lender does not have to honor a contract, the law called Protecting Tenants at Foreclosure Act and what that does is it requires that the renter's are given ample time to find a new place to live. At least 90 days.

I read that as much as 40% of all of the foreclosures in the past couple of years were houses that renter's lived in. Thats a big number.

The foreclosure crises has not been very kind to renters.

This new law at least brings some protection to renters.

The law should provide some relief from immediate evictions, according to NLIHC President Sheila Crowley. "This bill brings long overdue relief for the most blameless victims of the foreclosure crisis — the families who, after paying their rent each month, are suddenly told they must move out of the homes because their landlords have been foreclosed on," Crowley said in a statement.

In some situations if the house is bought after it went into foreclosure but a tennant has already signed a lease agreement, the lease agreement has to be seen through.

Renter's must have at least a 90 days notice before they can be evicted.

[luv2flip]

Well this happened to me in Ohio I had to move when the bank said even though I had lease, and my rent was paid up to date. I had 30 days to move, all I could do was take the old lanlord to court to get my rent money back, and that is just waiting in line for your money like everyone else that guy owes.