If I live in a home that is in foreclosure but I didn’t find out until after I signed a 12 month lease, do they have to honor it?

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If I live in a home that is in foreclosure but I didn’t find out until after I signed a 12 month lease, do they have to honor it?

Asked on May 24, 2012 under Real Estate Law, Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Foreclosure, unlike a voluntary sale (even a short sale) terminates leases; once the home is foreclosed upon and the owner you signed the lease with is no longer the owner, the lease is terminated and you can be evicted--though laws passed since 2009 to protect tenants in situations like yours should give you at least 3 months of residency.

If the homeoner knew he was in or going into foreclosure at the time you signed the lease but did not dislose that fact, he likely committed fraud (the intentional or knowing mispresentation of a material, or important, fact). That fraud could give you the right to void the lease and/or sue for monetary compensation (such as the cost of having to move out).


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