Tenant rights when renting a home in foreclosure?

Status: Open
Jul 29, 2017 Views8,321 Answer a Question

Met clients today with a valid lease in good standing who have received foreclosure notices with an 8/1 sale date. Landlord has assured them it has been handled. In the event that is not true and the property sells at Auction, will new owners still be bound to the effective lease which expires in November? Tenants have copies of the lease, I know if sold traditionally new buyers would be bound to the terms of lease, just wanted to verify this is also the case regarding a foreclosure sale.

About 6 years ago
I agree with Nella. There should be a realtor assigned to the property. Contact the lender and explain the situation. But make sure you have proof of the payments and copy of the current lease. Some properties may already be listed in the MLS under HAR. You can check and see.
Tenant does not have to immediately move after rent-house foreclosure
Submitted by Richard Alderman on September 19, 2015 - 12:00am
A foreclosure terminates your relationship with your landlord pursuant to the laws of the state of Texas. This means that your lease is terminated at the time of foreclosure. (The only exception is Section 8 leases, which may remain in force.)
You may not, however, have to move immediately. The federal Helping Families Save Their Homes Act of 2009, which became effective May 20, 2009, and expired at the end of 2014, gave tenants the right to stay in the rental home for 90 days after foreclosure. Although this is no longer the law, many parties who foreclose on rental property will still give the tenant 90 days notice. Texas law also requires that as long as you continue to pay rent, you are entitled to at least 30 days notice.
The bottom line is that there is a good likelihood you will have to move, but before making plans, speak with the new owners and see if they are willing to give you some time, continue your lease or give you a new lease.
source:
http://theexaminer.com/features/commentary/tenant-does-not-have-immediately-move-after-rent-house-foreclosure
About 6 years ago
If your clients contact the lender that has foreclosed on the property, sometimes they will assist them with moving expenses. Also these properties are usually purchased by investors or the lender repurchases them at the Auction. If that is the case usually the investor will honor the lease because they are going into the home making a profit. If the lender purchase the home at the Auction, they will usually honor the lease that is in place. It is unfortunate that we can not guarantee anything in these cases but if they contact the lender and explain that they have a valid lease in place the lender will work with them. It is also possible they may post the sale until after the lease expires. I pray all works out well with your clients. I have previously worked with lenders by offering Cash for Keys to tenants that are in a valid lease in addition to current home owners yet living in the home. I have found that the lender is not in the business of putting people out on the street, they just want the property to remain in as good condition as possible.
Disclaimer: Answers provided are just opinions and should not be accepted as advice.
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