There are renter rights if the home you rent is in foreclosure!
On May 20, 2009 the, “Helping Families Save Their Homes Act of 2009” was signed into law at the federal level. This act addresses the rights of renters or tenants who lease property that is in foreclosure. Over the past few years I have represented a number of real estate investors in chapter 7 bankruptcy cases. I always felt very uncomfortable when they rented to unsuspecting people when they knew the property was in foreclosure. They were taking money from people who could not really afford it for a residence that could shortly be foreclosed, and the renter could be evicted through no fault of their own. No More!
The provisions of this act expire December 31, 2012. Until then this is the law.
When you have a lease on property that has been foreclosed, you have the right to remain there for the duration of the lease, and there can be no eviction. The only exception to this rule is that you may be evicted for actions that are called “good cause”. These would be the normal grounds for eviction such as non-payment of rent or breach of the lease contract.
Other renter rights created by this law:
- If your lease ends in less than 90 days, the new owner may not evict you without giving you a minimum of 90 day notice.
- At the end of the lease term, the new property owner may terminate the tenancy (lease) if he provides a 90 day notice.
- The only exception to the right to stay for the duration of the lease:
- If the new owner will occupy the unit as a primary residence, and
- has provided you a notice at least 90 days before the effective date of the notice.
This is a significant departure from current Ohio law regarding eviction following foreclosure. Under the present scheme, once the confirmation of foreclosure sale is filed with the court, the purchaser at the sheriff sale can begin eviction proceedings. Ohio law allowed for a 30 day notice, hardly enough time to make other arrangements, especially when the first word you had of the foreclosure was when the new owner took title. The fact that you had faithfully paid your rent to the former owner was not a relevant defense. This new Federal law puts fairness into foreclosure of rental property.