By some estimates, a large percentage of the homes being foreclosed on across the United States today have been rented out. These properties may have been investment properties or the homeowners’ primary residence who thought that renting the home may be a stop gap to their money troubles. In either situation, many times the tenants are completely unaware of what’s going on, and continue making their monthly payments to the landlord. When the bank initiates foreclosure proceedings, the tenants find themselves in a very awkward and trying situation.
However, tenants rights during foreclosure have been strengthened by the “Protecting Tenants Rights at Foreclosure Act” signed into law by President Obama on May 9th, 2009.
The major provisions of this act are as follows:
-During the term of the lease, the tenant has a right to remain in the unit and cannot be evicted, except for actions that constitute good cause.
- If the lease ends in less than 90 days, the new owner may not evict the tenant without giving the tenant at a minimum 90 days notice.
- At the end of the term of the lease, the new owner may terminate the tenancy if the new owner provides a 90-day notice.
- The new owner may terminate the tenancy if the owner will occupy the unit as a primary residence, and has provided the tenant a notice to vacate at least 90 days before the effective date of such notice. This is the only exception to the rule that the tenant may not be evicted during the term of the lease.
These provisions expire on December 31, 2012.
Bottom line, be sure you have a lease and know what’s in it. Tenants have rights. For a brochure outlining these rights in North Dakota click on this link: http://www.ag.state.nd.us/Brochures/TenantRights-2003.pdf or here http://www.dakprop.com/rights.htm .
For Minnesota, click here to go to the Plain Persons Guide to Minnesota Landlord-Tenant Law http://www.tenant.net/Other_Areas/Minnesota/ppgmnllt.html
If you have further questions about foreclosure or how to avoid it, call me, Dan Whitman, at 701-238-2582.