Tenants in Foreclosed Properties Now have 90 days to Vacate

New Federal law passed May 20th 2009 gives tenants a minimum of 90 Days or more to vacate the foreclosed property. This law applies to all states. In addition, tenants must be allowed to stay in the property through the end of their lease, with two exceptions:

1. The new owner wants to occupy the property as a personal residence, and
2. There is no lease (month to month), or there is a lease but state law allows the lease to be terminated at any time upon notice.

The tenant must be a bonafide tenant who continues to pay market rent and is not in violation with the terms of the lease agreement.

What this means to you:

Tenant - As a tenant who is residing in a property that has been foreclosed on, you have the right to stay in that property a minimum of 90 days from the day notice is served to you. You must continue to comply with the terms of the lease agreement including the payment of rent on time.

• What happens to my Security Deposit? - The previous owner or property management company should transfer your security deposit to the new owner or property manager of the foreclosed property. Within 30 days of vacating the property, your security deposit is sent back to you minus any deductions allowed by the lease agreement.
• I am on a Month to Month lease, what happens to me? - As a tenant on a month to month lease you are allowed to stay up to 90 days from the date notice is served to you.
• Do I have to stay? - No. The new law provides the tenant with the right to stay. It is the tenants choice whether to execute this right.
• My lease expires within the 90 day period, do I have to leave as soon as it expires? - No. You can stay for 90 days.
• I do not have a copy of my lease and neither does the new owner, what happens now? - You would be considered to be on a month to month lease paying market rent and subject to the 90 day period.

New Owner - As the new owner of the foreclosed property, you have to provide the tenant with a 90 day notice to vacate the property. This applies to lenders, investors and owners with the intent to occupy the property

• We just purchased the property at foreclosure auction, what should we do? - First thing to do is get in touch with the current tenant and let them know that you are the new owner. Get a copy of the lease agreement from the tenant (if one was not provided to you from the previous owner or property manager). Determine if the tenant wants to stay.
• We were not provided with the tenants security deposit - If the previous owner or property manager did not transfer the tenant's security deposit to you, it is not your expense to give a security deposit back to the tenant.
  
• We are not experience landlords, who can we contact to help? - An experienced Attorney, Property Manager or Licensed Real Estate Agent can provide the expertise you need.
  

Have questions? Contact us. We can help.