The Perfect Location

Is Your Landlord Being Foreclosed Upon? What Are Your Rights?

Renting can hold a number of advantages over homeownership -- from the flexibility of being able to move at the conclusion of your lease to the lack of responsibility for expensive home repairs and upgrades. However, when the person to whom you are paying rent has chosen to pocket this money rather than pay the mortgage or property taxes on your unit, you could find yourself facing eviction through no fault of your own. What are your options if your landlord has plunged your rental home into foreclosure? Read on to learn more about your rights and responsibilities as a tenant in this unfortunate situation. 

What rights do you have if your unit is being foreclosed?

As recently as a decade ago, tenants had little recourse in this situation, and could remain unaware of the foreclosure proceedings until served with an eviction notice (or even met with a locked door) after the property was sold at auction. In the midst of the subprime meltdown, President Obama signed the Protecting Tenants at Foreclosure Act of 2009, which provided a number of protections to those whose rental homes were being foreclosed or sold at sheriff's sale. 

Under this Act, tenants who are current on their rent payments have the right to stay through the end of their lease, under the same rental rates and other terms as enumerated in the lease. Although the new purchaser is not required to renew the lease after its termination, they are also not permitted to cancel or void the lease or raise rental rates during the current lease term. This can give you some time to get your financial ducks in a row and look for a new place to live without the pressure of a pending eviction. It can also help you avoid having an eviction on your record through no fault of your own. 

What should you do if you suspect your landlord is not paying his or her mortgage

Although many tenants are taken by surprise at the news of a foreclosure proceeding, for others, it may be no surprise. Some signs that your landlord is not paying his or her or mortgage can include an increase in creditor calls and letters (if the landlord has previously had mail delivered to your residence), delays in services like trash pickup, or interruptions in the utilities your landlord pays directly. If you notice any of these red flags, you may want to have a frank conversation with your landlord or begin setting aside funds you can later use to move. Contact a firm like Fisher Associates, LLC to learn more.