Renters and Foreclosures
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Renters have more rights than they might initially realize, if they discover themselves in the precarious situation of living in a property that is about to go into foreclosure. There has been a growing trend of renters finding themselves stuck in the middle of their landlord's inability to stave off foreclosure and learning that they'll soon have to vacate the property, pending the arrival of new property owners. Some renters feel like they don't have much of a choice other than immediately packing their belongings and moving out. However, if a renter chooses to act in haste, and immediately moves out of the unit/property, the renter will find themselves inadvertently adding unnecessary financial hardships to their situation.
For instance, Fai Nomaaea, a 35-year-old mother, can relate. The single mom was cleaning the yard when a man handed her a notice of foreclosure. She had been paying her rent on time every month and was unaware of her landlord's financial difficulties with the property she lives in.
Now she doesn't know what to expect or what to do (she has eight children and moving everyone isn't as easy as it would be for a single individual) and she lives in fear of having to vacate the property at a moment's notice. Unfortunately, she can't make the decision to move, even if she wanted to at this point, as she is forced to stay in the unit because she is in a lease with the landlord. (She is still obligated to the original terms of the lease until the landlord loses the property.)
"I don't know what's going to happen the next day," she said. "I don't know if they're going to come to the door and tell us that we have to move, and I don't have anywhere to go," (CNN.com, 5/29/08).
Nomaaea is also fearful of getting booted from the home, as she lives on a fixed income and can only afford about $1,200 a month in rent. She would also have to find a new school for her children. But again, she has to stay in the unit until a move is made by someone else. She is in a very vulnerable position.
Here are some tips to follow if you find yourself in a similar situation (The Washington Post, 5/29/08):
-Keep paying rent until a foreclosure is final. If you do not, a landlord can have you evicted for failure to pay rent. Any court action, even if not carried out, can make it hard to rent another property.
-If you hear about the foreclosure the first time through contact with a lender or new owner, talk directly to the lender or new owner about an agreeable date to move out.
-Lenders or new property owners are not allowed to remove tenants or belongings without a court order.
-You do not have a legal right to continue living in a property that has been foreclosed on.
-You are entitled to get back your security deposit, based on the terms of the lease, after a foreclosure is final.
If you are still concerned and do not know what to do, contact an attorney immediately and find out what other rights you have as a tenant.