we are renters and fond out home is set for foreclosure sale next month what can we do?
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we are renters and fond out home is set for foreclosure sale next month what can we do?
We have been paying rent to the homeowners for over 1 year. We have invested over 15,000 of our own money into materials to make this home livable. Did most of the work ourselves with home owner permission. Yesterday we had a notice taped to the front door that said the home is In foreclosure set for auction on 03/24/2017. Home owners deny being behind.
Asked on February 27, 2017 under Real Estate Law, Michigan
Answers:
M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
Federal law gives some rights to tenants 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 for the longer of 90 days or until the end of the lease period, with the exception that if the new owner intends to move in and occupy the home as their primary residence a 90 day notice to move would apply. Tenants with a month-to-month lease, or no lease at all, have to be given at least 90 days notice to move. Further, in cases where state law provides more protection than the federal law, the state law applies. In the meantime until title to the property changes hands, so long as your landlord remains the owner of record you must continue paying your rent to them. After the foreclosure sale, they will no longer be the legal ower and you should then be informed as to where to send your rental payments by the new owner. One bright spot, is that sometimes an incentive can be negotiated with the new owner so that you can agree to move out prior to the end of your lease. This incentive is known as “Cash for Keys”, whereby the owner will pay you to leave the premises early in exchange for a cash payment. Regarding the return of any security deposit that you may have paid, unfortunately there may not be much that you can do. Typically, in such a situation, a tenant’s only legal recourse is to sue the landlord in small claims court and hope that you can collect on your judgment. The same may go for the $15,000 that you made in improvements, depending on just what you negotiated with your landlord.
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