Tips for renters dealing with a foreclosed property:
Q: How does a tenant know if a landlord is being foreclosed on?
A: Landlords are not required to notify tenants. The bank must post a notice on the property within 15 days of advertising a foreclosure sheriff’s sale in the local newspaper. The county can verify whether a home has been sold at a sheriff’s sale because that is public information.
Q: How is a tenant affected when a landlord goes through mortgage foreclosure?
A: Tenants usually must move; however, the foreclosure process can take months up to six months after the home is sold at sheriff’s sale to complete, and the tenant can typically stay until the end.
Q: What happens to a tenant’s lease if the property is in foreclosure?
A: Typically the lease is valid until the foreclosure redemption period is over – and when that happens, the new owner, which is usually the bank, doesn’t have to honor the lease. Lease usually is valid until foreclosure procedure ends.
Q: When does a tenant have to move?
A: After the redemption period ends. If the tenant gets an eviction notice, the tenant generally has a month to leave before court proceedings begin. If the tenant moves earlier, there should be no penalty because the landlord defaulted on the lease.
Q: Does a tenant still pay rent during foreclosure?
A: Yes, because the landlord still owns the property until the end of the redemption period.