Foreclosure Process

• State laws dictate how the foreclosure process proceeds which leads to wide variances among the states. Some states allow non-judicial foreclosures while others require a court approval before a property can be foreclosed on. Regardless of the type of foreclosure used in your state of residence, as a tenant renting the property you are entitled to be notified when the foreclosure process is initiated. Often, you are legally required to be listed as a defendant in the foreclosure complaint. The length of time it takes to foreclose on a property can vary from as little as 60 days in a non-judicial foreclosure jurisdiction to over a year in a state where judicial foreclosures are required.
  
  

Tenant's Rights In Foreclosure

• Historically, tenants had very few rights when a property was foreclosed upon since the lease was generally terminated upon foreclosure. The U.S. federal government, however, passed the Protecting Tenants at Foreclosure Act in 2009, which requires the lease to remain intact in most cases. If the new buyer plans to use the home as a primary residence, the lease can be terminated, but only after giving the tenants 90 days notice to vacate. Individual state laws may provide additional protection to tenants when a property is foreclosed on by the bank or lender.
  
  

Tenant's Obligations

• Until a property has legally been foreclosed on, both the landlord and the tenant are still legally obligated under the lease. As such, a tenant is still required to give notice as provided under the terms of the lease. If the lease requires you give 30 days notice of your intent to terminate the lease, then you remain obligated to do so. In addition, since the new federal law requires the lease to survive a foreclosure lawsuit, you continue to be obligated after the foreclosure unless the buyer plans to live in the property and notifies you of this intention by giving you 90 days to vacate.
  
  

Additional Assistance

• Landlord tenant laws can be complicated, particularly when a foreclosure proceeding becomes part of the picture. If you are currently a tenant and you have received notice that the property is in foreclosure, you may want to contact an attorney for legal assistance. Often, your county or city legal services organization will be able to provide you with specific information for the state where you live (see Resources).