Foreclosures are taking properties across the country, and while increased oversight and efforts to ease foreclosure rates are helping, there are many waves of foreclosures still ahead of us before the market clears. When it comes to foreclosed property, we tend to think of single-family homes owned by the resident; however, this is far from the only scenario. Commercial and rental properties are also undergoing foreclosures, leaving renters facing eviction.
Face the Facts: Get the Facts
Tenants (renters) don’t own the property, the landlord does. Whether the landlord is a person or business, that means that tenants have little control over what happens to the property. If the landlord is faced with foreclosure, there isn’t much a tenant can do about it. That does not mean the renter is helpless. Foreclosure notices are public record. Don’t accept someone’s word or a mailed notice as truth: verify that the foreclosure is real and not an attempted scam or illegal eviction.
Find out who is taking ownership of the property and what they plan to do. If they intend to continue renting the property, your rent cannot be raised for the term of your lease or for the 90 day period (whichever applies). Verify correct ownership of the property each time you pay the rent, and make sure you get a receipt for each payment. If you have any questions, send them in a letter and request written response. By keeping accurate records, you can protect your right to continue renting.
Know your Rights: Protect your Rights
If the new owner wants the existing tenants out, then you have to go, but not right away. Federal law prevents immediate eviction of tenants from a foreclosed property. The new owner is required to provide tenants with notice and at least 90 days to move. Some states or local governments may provide additional time. If the tenant has a valid lease for more than 90 days, the tenant has the right to stay through the term of the lease unless the new owner intends to inhabit the property. If the new owner wants to move in, then the tenant is limited to the 90 day allowance.
If someone is using aggressive tactics to push or threaten you out early, don’t let them harass you: demand everything in writing. This can make a lot of shady behavior disappear. Don’t be afraid to contact your local tenant’s advocacy groups, tenant’s associations, the state department of housing, the local real estate association, or a lawyer to get information and assistance or to register complaints.
Resist Scams: Report Scams
Many scammers are trolling foreclosure notices to rip off renters. Tenants of a foreclosed property may receive frightening letters that threaten immediate eviction and make promises, from extra time and relocation assistance to free rent, for an up-front fee. Many use legal-sounding jargon and claim to be many things, from “resolution centers” to “legal consultants,” but not actually lawyers themselves. One clear tip-off: guarantees – real lawyers don’t make guarantees. Never give your information or money to any organization without verifying the service is legit, and report scams to local authorities.
Local tenant’s advocates, tenants associations, real estate associations, verified nonprofit organizations, and local government may be able to provide information and assistance.
Want to find out if you have what it takes to be a Real Estate Agent or Broker?
About The Author: Tom Davidson is the acting Director of Sales & Operations for Colibri Real Estate, LLC. Since 1996 the companies under this banner have offered online real estate licensing and insurance licensing courses as well as online real estate exam prep and insurance exam prep.