If my rental has gone into foreclosure, when do I have to get out?

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If my rental has gone into foreclosure, when do I have to get out?

The house is listed in the local newspaper as being up for auction on the courthouse steps on the 5th of next month. My lease was month-to-month. I have had no contact from anyone except the landlord and all she told me was that the house was being foreclosed on. If the house sells at auction, how long does the new owner have to give me to move out? If the house does not sell at auction, how long does the bank have to give me to get out? Do I have to pay rent and to who?

Asked on May 30, 2012 under Real Estate Law, Georgia

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

There is a federal law that gives some rights and protections to a tenant in the event that their rental unit is foreclosed on. Basically, when a home goes into foreclosure, tenants who have a written lease can continue to occupy the home until the end of the lease period, or 90 days, whichever is longer (with some exceptions). In the case where there is not a written lease, a 90 day notice to move would apply. Additionally, in cases where state law provides more protection than the federal law, then state law applies.
 
As for who to pay rent to, if a foreclosure action has already been filed, as long as the landlord remains the owner of record that (i.e. he is still on the title to the property), a tenant must continue to pay them rent. However a tenant must be careful to find out just when title to the property passes. Former landlords have been known to try and continue to collect rent even after they no longer own the property. However, as a lawful occupant of a property in foreclosure, a tenant should be notified by the mortgage lender as to the sale/transfer date of the property (a tenant should then be informed where to send their rental payments). After this time, the landlord will no longer be the legal owner. 

Also, as to the return of any security deposit, when a property is foreclosed on there may not be much that a tenant can do. Typically, a tenant’s only legal recourse is to sue the landlord in small claims court. Yet, even though they may successfully win a judgment, actually getting the money that they are owed may be much more difficult.


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