On Sunday, I watched Channel 9 "The Turko Files" he talked about Tenants in Foreclosure! I've been wanting to do a blog post about this for months! He interviewed a man who signed a lease option to own until 2012. He had paid his rent through October, when he got a knock at the door for him to vacate because the house had been foreclosed upon and the new owner offered him $2000 to vacate immediatley. Needless to say, he said no at first; then they came to an agreement for $4000 and to be out by Sept. 1st.
For Tenants in Foreclosure! What are... their rights?
The Protecting Tenants in Foreclosure Act was Enacted May 20, 2009... and Expires Dec. 2012!
If a Tenant has been foreclosed upon, the new owner must give him 90 days to vacate! However, this law gives the tenant the right to stay in the property for the duration of his lease as long as the lease was in existence as of the date of the notice of foreclosure; unless two things-
1. The new owner has plans to make the home his/her primary residence or
2. If the new owner and the tenant negotiates cash for keys.
It is up to the tenant if the want to vacate for cash!
Tenants are not considered if they are arms length; the child, the mortgagor, spouse, parents or the previous owner. And they must have a receipt for rent for not much less than fair market value, unless their on Subsidized Housing... Interesting...
Even though this Act was created a over a year ago, its is becoming more relevant in todays times as tenants are being foreclosed upon or put up for a short sale, shortly after signing a lease! The truth is Banks don't want to be landlords, nor do investors... Its an infornatunate situation for everyone especially the tenants, so I say to the tenants, if you've truly been wronged, negotiate well.