Look in any newspaper these days and you’ll see a whole list of foreclosures. Not all of those foreclosures are just affecting homeowners, though.
Some of those houses were rentals, making life suddenly harder for tenants. If your landlord is losing your apartment, condo or house in a foreclosure, you still have some options.
#1 Know Your Rights
The actions new landlords can take vary from state to state. If you know that your situation is up in the air, it’s up to you to determine just what options your state provides you. If you have any sort of special status, such as participating in the federal Section 8 program, you may also have special status when it comes to a foreclosure. Section 8 participants, for instance, cannot be evicted if a property changes hands.
#2 Contact the New Owner
Your original landlord will have very little interest in helping you figure out your situation, but many new owners want to keep rental properties profitable. Some will terminate leases automatically, but you can often remain on as a month-to-month renter, hopefully making arrangements to sign a lease down the road.
#3 Negotiate with the New Owner
Many real estate investors who make a habit of picking up foreclosed rentals believe that empty buildings are easier to sell. If you can convince your new landlord of the benefits of regular income while searching for a buyer–as well as the fact that paying tenants can actually up the resale value of a property because a new owner doesn’t need to go hunting for new renters–you may be able to stay on. You can also request a cash payout to move quickly and without a fuss. Your landlord has no obligation to offer such a payment, but may be willing to do so rather than deal with the hassle of an eviction.
#4 Take it to Court
You may not be able to keep your rental, but you can sue your former landlord for moving costs and other damages. When he signed the lease, your landlord guaranteed that he could provide you with the use of the property for the full term of the lease. A foreclosure puts your landlord in breach of contract.
#5 Avoid Eviction at all Costs
Having an eviction on your record can make it much harder to find a new rental down the road. If the situation escalates to the point that the new owner is threatening eviction, pack up and leave. It’s not worth the fight.
Have you been in a similar situation recently or in the past? Share your story and advice below!