If you`re current on your rent,
the new owner [which is sometimes the foreclosing bank] has to let you stay through the end of your lease agreement.
If the new owner is going to occupy the property as a primary residence before your lease expires,
they have to serve you a 90 day eviction notice.
As of May 2009,
the lease is no longer dissolved by a foreclosure.
If you`re renting month to month then you have 90 days.
They may also give you a cash for keys deal,
wherein they`ll pay you if you vacate immediatly.
If you have a new place lined up,
I would take that offer.
it`s not worth it to join the ranks of other people without housing
On May 20,
2009 Obama signed the "Protecting Tenants at Foreclosure Act of 2009." This legislation provided that leases would survive a foreclosure -- meaning the tenant could stay at least until the end of the lease,
and that month-to-month tenants would be entitled to 90 days` notice before having to move out.
The actual foreclosure proceeding are complicated.
During the process the old tenant is still the owner,
so you pay rent to them just as you would were the property not being foreclosed on.
After the process is completed the new owner (which could be the bank)
MUST give you in writing the name and address of the person in charge of the property.
If you do not get this information,
you should ask the bank or new owner for it.
It is IMPERATIVE that you find out when ownership transfers so you know who to pay.
It`s not uncommon for both the old landlord and the new owner`s agents or lenders to come around demanding rent.
Make sure you know who owns the building,
so you know who to pay and who not to pay.
Foreclosure can go 2 ways:
If the owner owes more than what the property is worth,
ownership transfers to the bank.
If the owner owes less than the property is worth,
the home is sold at auction and the highest bidder becomes your new landlord.
KEEP PAYING RENT.
Pay to your current landlord unless the court tells you to pay to someone else,
then start paying that person (known as the "receiver").
Depend on your current landlord for repairs and maintenance still.
Foreclosure proceedings doesn`t mean the landlord WILL lose the property,
so you should only stop paying him rent once he`s actually lost it.
When ownership transfers,
notify the old landlord that ownership has transfered and you no longer owe him rent.
If you have strange people claiming to be landlords and lenders hounding you for rent and you don`t know who to pay,
write letters to both your old landlord and the lenders telling them you`ll pay rent once they communicate with each other about who has the right to rent.
Get legal help if you get a "pay or quit" from either of them.
While foreclosure is going on,
you have a legal right to live there.
The bank cannot force you to leave while the foreclosure is going on.
See if you are named as a defendant in the foreclosure.
If you are named as a defendant,
a marshal will serve you with foreclosure papers from the court (they must have YOUR name on them,
not just "current resident" or "jane doe").
If you don`t know if you are a defendant,
or go to the court clerk`s office.
If you`re a defendant,
you`ll have to fill out court papers and pay attention to certain deadlines and you should probably get a lawyer or talk to legal aid about the forms you have to fill out and when you have to appear in court (but keep paying rent to the current landlord).
If the foreclosure happens mid-month and you paid your rent to the previous landlord on time at the beginning of the month,
it is considered paid and the new owner can`t demand rent for the rest of the month.
That`s handled at the closing and the old landlord would have already handed over the remaining month`s rent and security deposit to the new owner.
After the foreclosure,
if you decide you would like to stay to the end of your lease,
the new owner will probably ask for a copy.
If you don`t want to stay,
usually the bank will have no problem letting you out of the lease (for some reason they enjoy trying to sell empty properties rather than rented ones).
Get any cash for keys deals IN WRITING and don`t hand over the keys unless you get the specified amount of money.
Don`t let them abuse you into leaving with less than was promised.
If actual people own the home,
you`d have to negotiate ending the lease with them and they might welcome it or they may not.
If you are not listed as a defendant then the bank has to wait 90 days until after the foreclosure is completed before they can evict you,
BUT if you have a lease you are entitled to stay until the end of it unless the new owner wishes to use the home as a primary residence.
Then they would serve you with a 90 day notice.
once the foreclosure has been completed and the house is under new ownership,
the new owner can`t simply change the terms of the lease on you.
If your previous owner paid for utilities,
the new owner must do the same.
If your rent was $500,
it stays at $500.
A note on utilities though...if the landlord pays utilities and,
during the foreclosure,
he defaults on them,
the company cannot discontinue services without notifying you and giving you the opportunity to arrange payment.
If utilities were covered by your rent,
you can deduct them out of your rent.
If the new owners also refuse to pay for utilities,
and they were included in your rent,
you can deduct them from the rent you now owe them.
Pay your rent to the new owner each month.
If they refuse to accept it,
save the money (don`t spend it)
in case they come back later asking for unpaid rent.
Whoever owns the property at the time you move out is responsible for paying back the security deposit.
The old owner/landlord should have given the security deposit to the new owner/bank at the closing,
so you`re still entitled to receive it back (assuming the conditions for its refund were met).
During the actual foreclosure,
if you`re a defendant in the process all papers will be served by a state marshal.
If some Joe Shmo comes to the door trying to get you to sign papers or pay him money and you`re not sure who they are or are confused about who you owe money to,
find out before you sign or pay.
And as I said before,
they cannot make you leave while the foreclosure is going on,
as long as you keep paying rent to the current landlord (or their court-appointed receiver).
All the tenant privacy laws still apply,
meaning the bank/new owner can`t just walk into the place without going through the necessary process (ie 24 hour notice that they`re entering the property,
unless in emergency).
Anything you would have to sign during the process (court papers)
should be discussed with a lawyer or public legal aid first to make sure its being filled out correctly.