What are a renter’s rights in a foreclosure situation?

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What are a renter’s rights in a foreclosure situation?

We have been renting the home we are in for almost 2 years. We came home 08/27/10 to a notice on the door stating that the home is now owned by Fannie Mae and to contact the realtor listed to go over our options. We chose the 90 day’s .We have never been served a 90 day to quit. Was the verbal over the phone all they had to give us or do we have to be served? And once we are served does the time start when we are served or can it be proactive from the time of our phone call took place? Will we get our deposit back? How lng can we stay ? We don’t want an eviction.

Asked on October 26, 2010 under Real Estate Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

1) The new owner can evict you; the new owner is not bound by the rental agreement with the former owner, since the new owner was not a party to it. However, to evict you, they have to go through the formal eviction process. That means that if you're not out after 90 days--which is how long, in most circumstances, tenants in your position can remain in a home after its been acquired by a bank, etc. at a foreclosure sale--they would then have to bring a legal action and serve the summons and complaint on you; I think they'd also need to provide a notice to quit at that time, but might be able to go directly to serving the summons and complaint. (It makes little difference; the notice would just add another 3 or 5 days to the process.) Since eviction takes around 2 - 4 weeks, depending on exactly how everything is scheduled, they could get you out, if they move aggressively, around a month after  the 90 days are up.

2) You have no right to stay--there is no defense to eviction in a case like this; but you could try to work something out with Fannie. For example, they could choose to rent to you, for example, even if only for  a few extra months to give you time to leave. They could even choose, potentially, to sell to you on favorable terms.

3) You are entitled to your security deposit back.

It would probably be in your interest to retain an attorney who can help make sure you get your security back and who can help you either work things out with Fannie, or at least force them to do all the paperwork right and make sure you have as much time as possible.


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