What are my options if I rented a house in foreclosure?
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What are my options if I rented a house in foreclosure?
I recently found out that the house I rented 7 months ago is in foreclosure and up for public auction in 3 weeks. How do I find the lender to ask about cash for keys? How long before I have to move?
Asked on June 8, 2016 under Real Estate Law, Florida
Answers:
M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney
Answered 8 years ago | Contributor
Federal law gives protection to a tenant in the event their rental unit is foreclosed on. It requires that when a home goes into foreclosure, a tenant who has a written lease can continue to occupy the home until either the end of the lease, or 90 days, whichever is longer. The exception would be if the new owner intends to move in and live in the home as their primary residence. In that case, a 90 day notice to move would apply. A tenant with a month-to-month lease, or no lease at all, have to be given at least 90 days notice to move (in cases in which state law provides more protection, then state law applies). Additionally, an incentive can sometimes be negotiated between a new owner and a tenant whereby the tenant agrees to vacate prior to the end of their lease, or 90, which ever applies. This is known as “Cash for Keys”. Basically, the owner pays a tenant to leave the property early in exchange for a cash payment.
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