5 Things Renters Need to Know About Eviction from Foreclosed Properties
Being uprooted is frightening for anyone. But renters endure added stressors: They often are the last to know that a foreclosure is in the works, having paid their rent faithfully each month; and they typically are the most misinformed about their own rights, through no fault of their own. Know the facts if you find yourself in this situation.
1. The lease and tenancy take precedence
The Protecting Tenants at Foreclosure Act of 2009 is a federal law that allows renters to remain in a foreclosed building for the duration of their lease. Tenants who have a month-to-month lease or who are under an oral agreement — so-called tenants at will — can stay at least 90 days from the date they receive a written eviction notice. Because this is a federal law, it applies to renters in every state, city and town.
The only exception is if the new owner plans to live in the unit himself before the lease or the 90-day period expires.
2. If someone official tells you otherwise, take a name
While strict ethical codes govern what real-estate agents must disclose to buyers and sellers, the same principles do not seem to apply to what agents do, and do not, tell tenants, Preston says.
“There is a widespread violation of tenant rights by agents of banks after foreclosure, and some of the worst violators are the real-estate agents,” he says.
Agents will request to show the unit multiple times a day, or dozens of times in a week. Some have posted notices falsely proclaiming that an eviction proceeding has begun, even though none has. Many aggressively push cash-for-keys programs that are not a good deal for the tenant.
Tenants, after all, are not their clients, and agents are essentially rewarded for clearing a property quickly. If you think you have been provided misleading or erroneous information, report the incident to the state’s department of housing or the local real-estate association.
3. Get it in writing
“A lot of these tactics that are used to deceive tenants are done verbally,” Preston says. That’s intentional. Agents don’t want to get in trouble.”Tenants can make a lot of these verbal harassments go away just by demanding everything in writing.”So if someone is at your door, simply tell that agent: I don’t wish to discuss my tenancy any further. Please put it in writing.
4. Cash for keys is only a request
The tactic currently in favor is to offer tenants — many of whom aren’t aware they can even stay through their lease or 90 days — cash to leave quickly. This may be a good option for some tenants, but often it is not. Typically, the tenant receives the cash only after handing over the keys, far too late to use as a deposit on another apartment. Often the amount is less than the security deposit, which the tenant might lose. Worst of all, many tenants grab the cash unaware that they could have stayed in the apartment longer, giving them more time to find a new home. Preston’s advice: Always seek help from a local tenant advocate in the case of an eviction.If you do accept cash for keys, ask for a good portion of the money upfront.
5. State and local laws may offer additional protection
A small but growing number of localities are passing just-cause eviction laws that exclude foreclosure. There are state laws in Massachusetts and New Jersey. What this means is that landlords can never evict tenants without cause, and foreclosure is not considered a cause.