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What You Need To Know.

Know your state and local laws.

There are many local rent-protection ordinances that are in place that protect renters. Some jurisdictions, for example, may require that renters have more time to vacate the premises, while others may have specific regulations regarding the foreclosure process. For example, in Connecticut, unless you are named as a defendant in a foreclosure suit, a lender can't evict you after the foreclosure. You can access information pertaining to your state's rental ordinances through the HUD Web site.

See if federal rules apply.

If you're living in government-subsidized housing and the property is foreclosed on, you may have a right for assistance in the form of a voucher. While you will likely still have to move, you may be awarded some relocation expenses.

Check public records.

In some cases, a new owner may not be able to evict you if the lease predated the mortgage loan. The best way to find out when the mortgage loan was taken out or if the mortgage was refinanced since your lease was drawn up is to check county records. If your lease is older than the mortgage agreement, contact an attorney because the case, depends upon the loan documents, which need to be looked at carefully.

Demand a refund of your deposit.

Depending on the state, landlords have a set amount of time to return a security deposit. Despite the foreclosure and eviction notice, your landlord should not walk away without meeting this obligation. If your landlord fails to pay up, write a letter (to establish a paper trail) requesting your security deposit and also informing the landlord that you will follow up with legal representation.

Contact the lender or new owner.

If you don't want to move, you can always contact the lender or new owner to see if they would be interested in letting you continue to rent the property. Your chances may be better if the new owner is an individual rather than a bank, because banks typically want to unload properties as quickly as possible. However, understand that the new owner has no obligation to agree to your request.

Look into "Cash-for-Keys" programs.

Some lenders offer financial assistance to renters if they will vacate the property by a certain time or leave it in good condition. While such a program won't save you the hassle of moving and it may require you to move even faster than you'd planned, it may be worth it if it will give you a sizable amount to put down on a new home or apartment. The lender may not approach you with such an offer, so ask for it.

Bet You Never Thought You Could Be A Tenant And Be Facing Foreclosure?

With foreclosure rates on the rise around the country, the latest victims of foreclosure are renters. Unfortunately, when a rental property goes into foreclosure the families living in the property are most likely unaware that the foreclosure process has even began. Law & Associates, LLC receives multiple calls a day with families seeking assistance from foreclosure while they are only tenants in the property. While there is very little that a tenant can do to avoid being impacted by the foreclosure proceedings they need to be aware that the mortgage lender has no obligation to honor a lease agreement or any other legal contract you may have with the owner. While Law & Associates, LLC specializes in home loan foreclosure we are unable to assist tenants of a property unless the homeowner is cooperative with our efforts. Below we have compiled some common questions and answers that may help you understand what options you may have as a renter in foreclosure.

Q. What does law require for a lender to evict a tenant?

A. The lender must in most states give the occupants “reasonable notice” before initiating an eviction.

Q. Does a lender need a court order to evict a tenant?

A. Yes.

Q. Does a tenant have to move out if offered money — “cash-for-keys” — from the lender or its agent to do so?

A. No. The tenant may remain on the premises until an eviction action is completed.

Q. What happens if a tenant does not leave after receiving a “notice to vacate the premises”?

A. The tenant will receive a summons to appear in court.

Q. Does the tenant have to respond to the summons?

A. Yes.

Q. What if the tenant does not respond or is unable to appear in court on the date of the trial?

A. A “default judgment” for the lender to take possession of the premises can be entered, meaning that the tenant will be evicted on the date set by a judge.

Q. If a tenant is evicted, what happens to the belongings inside the house?

A. A sheriff or constable will serve the tenant with an “execution of eviction” and movers will pack up the belongings and place them in storage. The only way a tenant can recover possessions is to reimburse the bank — or, in some cases, the landlord — for the eviction, moving and storage costs, which generally run from $1,500 to $2,000.

Q. What should tenants do if they think their house is in the process of being foreclosed?

A. Try to find out if the property has been advertised for foreclosure sale by checking legal notices in the newspaper or on the Internet. They should also look for another place to live.

Q. If a tenant discovers that his house is in the process of foreclosure, is he required to keep paying rent to the landlord?

A. Until the foreclosure is completed — with the transfer of the property deed to the lender at a city or town hall — the property still belongs to the landlord and the tenant can be held responsible for rent. If the tenant stops paying rent and foreclosure is stopped, the landlord can bring the tenant to court for nonpayment of rent.

Q. Can tenants recoup their security deposit?

A. Courts generally have held that lenders have no obligation to reimburse tenants’ for security deposits.

Channel your efforts and energy.

While you have no recourse for suing the lender or new owner, you can, conceivably, sue your former landlord for breach of the rental agreement. However, lawsuits cost time and money, and all of the effort may be for naught because, Most landlords that can't make their payments don't have very many assets. Your time may be better spent looking for a new home and getting as much financial assistance as you can in the forms of your deposit and any fees being offered by the lender.

Protect your credit rating.

If you know your landlord is in the process of foreclosing, you may be tempted to skip your rent payments. Until the foreclosure is complete and the new owner lets you know you are being evicted, you are still responsible for paying your rent. For all you know, your landlord may get a cash windfall that enables him to stop the proceedings at the last minute and you'll be faced with an eviction notice for failure to pay your rent.

Service Commitment: Law & Associates has been able to help the vast majority of homeowners who have sought help. It is the only thing we do. We promise to give all our clients our very best care and attention. Your home is likely to be your biggest and most important investment. It is more than brick and lumber. It’s a place where your family lives and dreams. It’s a place where memories are held and loved. We keep a clear view of that as we do all our work.

Law & Associates, LLC. is a foreclosure management firm, we are not Lawyers nor a legal firm and will not provide legal advice.

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