Does A Tenant Get The Short End On A Short Sale?

So - you decided to rent your home.  All is going well and you get it rented with someone who signed a one year lease.   

A month later, you decide to sell the home - and it's short sale - and it sells in about five months.   The new owner (buyer) comes along and is now threatening to evict the tenant because the tenant hasn't moved out.

Can the tenant stay in the home for the rest of the lease term?

Yes.  Because of a 2009 federal law that requires a new owner after a foreclosure to honor the lease of any existing tenant.  Generally speaking, a lease for a home entered into before any sale of a home, including a short sale, over-rides new homeownership interest.

What should you do if you are a Buyer in this situation?

• First of all, if someone is living in the home that you are about to buy, ask questions.
• If they are tenants, ask for copies of the lease and make sure your agent works the security deposit into the settlement agreement.
• Find out if the home was rented vacant or furnished.  If it was furnished, the furniture has to be returned to the original owner - which was the previous owner/landlord.
• Be nice to the people living in the home, don't threaten and if you cannot wait out the remaining time on the lease, you can always try to work something out with the tenants.

What should a tenant do in this situation?

• Keep paying your rent on time.  Not paying your rent does not solve any issues and only creates more.
• Ask questions about the new owners and their plans and try to work with them.
• If you know the home you are in is being sold, and you know that you will eventually have to move, why not start looking for another home before you have to!?

 

Buying or selling Tucson real estate, Mt Lemmon, Tucson bank-owned homes, Tucson rental homes, or Tucson lease option homes? Visit www.KGCPropertiesLLC.com!

                                     

This blog is written with my opinions and my opinions are presented with accuracy but not guarantees. Please talk to a professional before making any real estate, financial or agency decisions.    Gabrielle Kamahele Rhind - 2011. If you want to reprint parts of this - just email me for my permission: TucsonsRealEstate@gmail.com.