Despite the hype of a housing market rebound, foreclosures are still at a record high. In fact, a large portion of our rental customers are tenants that have been notified that the property they are renting is in foreclosure. Their biggest concerns are, “what happens next and how much time do we have?” Statistically speaking, about 20 percent of foreclosed properties are renter occupied, so they are not alone.
Very few renters know that in 2009 a federal law known as the Protecting Tenants at Foreclosure Act was put in place to protect renters when the home they are renting is foreclosed on. There are two different types of protection offered tenants by the PTFA, depending on the individual situation. The first one is for renters whose rental property is bought by an investor or financial institution. If the tenant has a valid long-term lease and there are nine more months to go, the new owner must abide by the lease terms, allowing the tenants to stay in the property for the duration of the lease. During this time no changes can be made by the new owner to any of the lease terms or conditions. The exception to this particular rule is if the new owner is an individual looking to make the property his/her primary residence. In this case, the new owner may take possession of the property before the end of the lease, but they must give the tenants a minimum of a 90 day notice to vacate. The second type of protection applies to renters with a short-term lease or no lease at all. The law requires that the new owner, regardless of who that may be, give the tenants a minimum of 90 day’s written notice. Knowing the basic provisions of the PTFA can help you from being illegally evicted from your rental home.
Using a licensed realtor can help you minimize the risk of renting a property that may be in foreclosure by checking county courthouse records and using the Multiple Listing Service. A realtor can also help protect you by assisting with all the necessary lease preparation and paperwork.
If you are, or have been, in this situation and have experienced something that may help other renters, we would love to hear from you.
Paula Stone-Gallien; Daniel Gallien – Rent 1 Sale 1 Realty