I cannot tell you how many times I hear from tenants who call me looking for a new home because they are tired of renting and I hear this story, "I was renting a home and got served with a foreclosure notice!  Now what?  Do I have to move?  Can I stop paying rent if the landlord isn't paying the mortgage?" 

First and foremost, don't stop paying your rent if you are in a lease, as this could backfire on you and cause a failure to pay rent notice to hit, and damage your credit, causing you to be unable to purchase a home.  If you find yourself in this situation, it is best to consult a real estate attorney.  Fortunately there are some new tenant rights that have just come into play which may help protect tenants who've just been served, and give them at least a little more time to find another suitable place to live.

On May 20, 2009, the "Helping Families Save Their Homes Act of 2009," P.L. 111-22, was signed into law. Included in this act are provisions to protect to tenants faced with eviction if their rented property goes through foreclosure. The tenant protection provisions apply for any foreclosure on a "federally-related mortgage loan," or on any dwelling or residential real property.

Under this law, tenants must receive notice at least 90 days before eviction. Additionally, tenants must be able to stay in the residence until the end of their lease, with two exceptions: (1) where the property is sold after foreclosure to a purchaser who will occupy the property as their primary residence, and, (2) where there is no lease (or where the lease is terminable at will under state law). However, even when these exceptions apply, tenants must still receive 90 days' notice before they may be evicted.  Read more here about these new provisions.

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