Atlanta Foreclosures for Sale - What happens to renters when home is foreclosed?
This question is being asked more and more in this Atlanta real estate market.
Our on-site closing attorney, Leigh Clack with Neel & Robinson, wanted to share this information with as many people as possible. Here's the scoop...
Before 2009, a rental agreement / lease was automatically terminated by a foreclosure, and the tenant was expected to move out as soon as possible.
On May 20, 2009, Congress passed the Protecting Tenants at Foreclosure Act as part of the Helping Families Save Their Homes Act, and here are the current rules and protections for tenants (valid through December 31, 2012):
1) The tenant must qualify as a valid renter:
- Not the owner or former owner, not a child, spouse, or parent of a former owner;
- Rent must be close to fair market rent;
- If the rent is much less than fair market rent, must be subsidized by a government program (such as Sec. 8);
2. If the new owner (bank or purchaser at the foreclosure sale or afterwards) plans to live in the house, the tenant must be given 90 days notice from the foreclosure date to move out.
3. If the tenant does not have a written lease or is leasing month to month, the tenant is still entitled to the 90 days notice.
4. If the new owner (bank or purchaser at the foreclosure sale or afterwards) does not plan to live in the house, the tenant is allowed to stay for the remaining term of the lease. The new owner would be entitled to all rent and subsidized lease payments.
5. The new landlord is not responsible for returning old security deposits to the tenant.
6. The tenant is still responsible for all rental payments and may need to save some payments until the new landlord is identified.
Presented by Leigh Clack, Attorney :: Neel & Robinson Attorneys at Law, LLC :: Atlanta, GA
404-705-3690 or lenox@neelandrobinson.com
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