What are my options when the home I am renting was foreclosed on without my knowledge?
Full Question:
Answer:
Your landlord does not have to tell you the home you are renting is in foreclosure. But before the home is sold, a “Notice of Sale” must be posted at the home.
The following notice must also be posted at the home and mailed to you:
“Foreclosure process has begun on this property, which may affect your right to continue to live in this property. Twenty days or more after the date of this notice, this property may be sold at foreclosure. If you are renting this property, the new property owner may either give you a new lease or rental agreement or provide you with a 60-day eviction notice. However, other laws may prohibit an eviction in this circumstance or provide you with a longer notice before eviction. You may wish to contact a lawyer or your legal aid or housing counseling agency to discuss any rights you may have.”
Until the home is sold, you must continue to pay your monthly rent to your landlord. You owe rent to the new owner once the home is sold. If the new owner wants you to move out, they must give you a 60-day written notice. If you don’t move out within 60 days, they can begin the eviction process. The new owner cannot cut off your utilities, change the locks or make other efforts to throw you out.
Your landlord must return your security deposit minus any lawful deductions, or transfer it to the new owner. If they fail to do so, both the old and new owner are liable.
If you have a written lease with your landlord and signed your lease after your landlord took out the mortgage, the new owner does not have to honor your lease. If you signed your lease before your landlord took out the mortgage, it may still be valid and the new owner may have to honor the lease.
Lenders or their agents often offer home occupants "cash for keys" - an up-front payment to move out by a certain date, earlier than the required 60 days. Tenants who agree to "cash for keys" should make sure to get that agreement in writing signed by an authorized bank representative. If you live in a city with rent control, they are covered by its eviction regulations, and the 60 day period doesn't apply.
If there were any mistakes in serving the 60-day eviction notice, it an be appealed. Such notices must be in writing; must be served on the tenant either in person or by mailing plus posting to the front door; and cannot be issued until the lender has recorded a trustee deed certifying that it has repossessed the house.
If the tenant does not move out after 60 days, the lender must file for unlawful detainer (eviction) and get a judge's permission to proceed with an eviction. If the tenant has not been able to relocate, it is possible to dispute the eviction, which may delay the process another two or three months.