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5 Useful Tips For Tenants For Renting A Foreclosed Property

Foreclosure is when a family or the owners of the house are unable to complete the mortgage due to financial constraints or other reasons. Being a very harsh and unpleasant thing to go through for the owners, it could also be unpleasant for the new tenants. When the landlord fails to pay the mortgages, the bank takes away the ownership and the burden of the mortgage falls on the tenants. In such cases, the tenants become the new owners of the property. The banks refuse to become the landlords and hence the property is then up for sale which leads to the eviction of the tenants. If you are a tenant at a house which is being foreclosed, here are a few instructions:

  1. In case of foreclosure, you will start getting notices by the bank or its attorney. The first thing to do is to let the bank or the attorneys know that you are still living on the property. The matter should also be communicated to the landlord as it is important to know the status of foreclosure. The landlord should be regularly updating the tenants. Sometimes, the landlords avoid foreclosure by coming to an agreement with the bank or by applying for bankruptcy. If the landlord refuses to disclose information about the case, track the process on your own.
  1. It is also important for a tenant to know their rights. The rights of tenants involved in foreclosure change from state to state. The tenants should find out what their rights are, which would help find out how much time they have to find a new place and move out. The laws vary greatly from state to state. Hence, it is important to talk to an attorney about the matter to know your rights.
  1. You are entitled to remain in the property during the process of foreclosure. You should continue living in the property and pay your rent as long as the eviction does not occur. If you fail to pay the dues, the landlord has a right to evict you legally. If, during the foreclosure, the landlord breaches the lease, you are entitled to file a legal case against them. Once the property is taken away from the owner, it becomes a matter between you and the bank. Under no circumstances can the owner sell the property or force you to take an action on their behalf.
  1. If, during the foreclosure, the landlord decides to sell the property, the lease agreement would not be terminated. Instead, the new owner will be the new landlord. If the bank sells the property after foreclosure, it is necessary to evict the house. In such cases, the tenants are forced to move so one should remain diligent and should look for new places. Although the bank does not require the tenants to move out right away, they get enough time on their hands and a number of notices are sent before the time of eviction. The length of time given to the tenants to move out varies in different states; most commonly, the length is between 30 to 90 days.
  1. There is a possibility that the owner will ask you to move out early by offering you money. Now it is up to you if you want to accept the money and move out, but you are not legally bound to. If you decide to agree upon cash for keys, make sure that you get the agreement in written form and it is signed by all parties.

Foreclosure is a frustrating process for tenants and the landlord. It is advisable to keep everything documented, as there might be some disagreements between you and the landlord and the landlord might mislead you about the laws related to foreclosure. Moreover, it is important that the tenants know their rights. In some cases, the landlords get away with early evictions because the tenants do not realize that the landlords are lawfully bound to not discontinue the lease. There are a number of tenants’ rights organizations which have the expertise and experience to help you fight for your rights. If you seek the representation of a lawyer, it should be confirmed that the attorney is licensed and an expert in real estate laws.