Is Your Rental Being Foreclosed?

I get calls and inquiries all the time from renters who say the home or condo they are renting is being foreclosed and they fear they will be thrown out on a moments notice.

This is not true! A federal law was passed in May 2009 that protects tenants whose rentals are being foreclosed. This is Public Law 111-22, effective May 20, 2009, TITLE VII--PROTECTING TENANTS AT FORECLOSURE ACT.

In a nutshell, if you have a bona fide lease and are paying fair market rent, the new owner of the property must honor your lease. Unless, the new owner is going to occupy the property, then they need not honor the lease, but must give the tenant 90 day notice to leave the property.

If you do not have a lease, then the new owner must give you 90 day notice to leave. Also, the lease transaction must be an "arm's length transaction", meaning the lease can not be a spouse, child, or parent of the original owner.

You must also be current on your rent.

Keep in mind also, if you are current and keeping the rental in good repair, many banks who are foreclosing will pay a tenant to move out and leave the property in good condition. This is known as "Cash for Keys".

TITLE VII will terminate on December 31, 2012.

And since I am not an attorney or a politician, here is the link to the ACT with all the specific details: http://www.nlihc.org/doc/701-704-Public-Law-111-22.pdf

I look forward to your comments and experiences on this topic.