What Happens If The Home I'm Renting Is In Foreclosure?

With more and more houses being foreclosed on

, it is inevitable that some people renting are going to be caught in the crossfire. If you're one of those people, the first thing you need to do is find out how much time you have left.

If the home is still owned by the owner of the home, continue to pay the rent to the landlord. In case your landlord is able to prevent the home from foreclosing, you will have to honor your contract with them. If you decide not to pay rent, the usual contractual rules apply and you could receive an eviction notice or be sued for the rent owed.

Once the property has been sold either through short sale or REO sale auction, the home will no longer belong to your landlord. There are times when the new owner will grant existing tenants the right to stay in the home and continue to rent to them.

Most states have regulations to allow renters to have a redemption period of up to one year. You may remain in the home during the period, unless the landlord decides to take possession back.

Depending on local state laws, if there is a new owner, some states only have to give 30 days notice of eviction before taking possession of the property. Under a foreclosure, all leases are considered null and void. There is only a very small amount of cases where the new owner has been forced to let the lease expire before the eviction.

If you can afford it, you may want to consider buying the house from the current owner. Both parties win here - you get a great deal but it is still a better deal for the owner than they would have gotten otherwise.

You may also be offered "a keys for cash offer", whereby the bank will pay you to vacate the home early and may also provide assistance in your move.

New owners and banks only have to give you 30 days notice to leave, so it's a wise idea to find a new home as soon as possible.

by: Jared Wright

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