If you are living in a property that is currently going through foreclosure you should know that you have rights that your landlord must acknowledge.
In 2009 the Protecting Tenants in Foreclosure Act was signed into law by President Obama. The law gives tenants much needed protection against the foreclosure of property owned by their landlords.
If you reside in a foreclosed property you are as much a party to that lawsuit as the owner. This means that you should respond to any foreclosure documents that may be served on you, and you should discuss with your landlord what they intend to do, if anything, about the foreclosure.
If you are served with a Notice of Foreclosure you should file a written Answer to the Court explaining: (1) You live in the property and are paying rent; (2) If you have a lease state when the lease expires; and (3) attached a copy of your lease to the Answer. You must continue to pay rent to your landlord throughout the entire foreclosure process or risk an eviction. If you file an Answer you will be notified of hearings as the case progresses.
If your landlord is unable or unwilling to stop the foreclosure (i.e. by paying its mortgage), a foreclosure sale will occur; the buyer of the property will become the new owner and your new landlord. Now, if this happens you still have rights as a tenant. The new owner must honor your lease until it expires unless you have what is called an “at will” tenancy (your lease contains language that permits the landlord to end your lease at any time) or if you have no lease, or if the new owner intends to move into the property. If any of these conditions apply the new owner must give you 90 days notice, and within those 90 days you must find new housing as your lease will end.
Otherwise, if you have a written lease, are not an “at will” tenant, and the new owner does not intend to inhabit the property, the new owner must honor your existing lease for the time remaining on it., After the judicial sale you are no longer required to make payments to your old landlord, the new owner should receive those payments. However, this is very important, make sure you obtain proof of ownership before you pay them any money. Make sure to get any agreements with the new landlord in writing. Section 8 housing landlords are bound by the same restrictions.
If the new owner fails to give you at least 90 days notice to terminate your lease you should send the owner a letter objecting to the termination before the date indicated on the notice, send it to the address the owner puts on the notice, and send it by certified mail, return receipt requested. If the owner ignores your letter and files an eviction complaint against you, you should file an Answer with the court stating: (1) the termination notice sent by the owner was improper because you were given less than 90 days notice; or (2) that the owner could not evict you until the lease expired under the Protecting Tenants at Foreclosure Act.
Keep copies of everything you send to the new owner or submit to the court. If you are required to go to court bring all copies of papers you submitted to the court and to the landlord.