Keller Williams Realty Atlanta – Peachtree Road
Real Estate Legal Tip
Presented By:
What Happens to Tenants When a Property is Foreclosed?
Before 2009, a 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:
a. Not the owner or former owner, not a child, spouse, or parent of a former owner;
b. Rent must be close to fair market rent;
c. 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
22 Lenox Pointe, Atlanta, GA 30324
404-705-3690 fax 404-705-3697
lenox@neelandrobinson.com
More Atlanta Real Estate Legal Tips:
Make Sure Your That Your Contract Is Legible
Useful Tips To Verify Property Addresses
KW Atlanta Real Estate Legal Tip: Special Stipulations for Residential Leases
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