Your rights as a tenant in case of foreclosure
If your landlord has mortgaged the property and defaulted in making the monthly payments, the lender will foreclose the property. However as a tenant in a foreclosed property, you have certain rights. Your right will depend on whether you are living under a lease or as a month to month or period tenant and how long you have been staying on the property. If you have a lease agreement, generally you will be allowed to continue living on the property until your lease is over.
If you are a periodic tenant, the landlord must give you a 30 or 60 day notice terminating the tenancy. If you have been staying on the property for less than one year as a month to month tenant, the landlord must give you a 30 day notice. If you have been living on the property as a month to month or periodic tenant for more than a year, you are entitled to a 60 day notice. Local jurisdictions may impose their own requirements on these notices. Generally commercial tenancies and certain tenants at will are exempt from this 60 day notice requirement. If the tenant is named on the foreclosed deed, this notice requirement will not apply. There is no need for the new landlord to give this notice if the new landlord or lender is selling the home to an individual who intends to use the property as his or her residence for at least one year, the notice to terminate the tenancy is given within 120 days of opening an escrow and the landlord has not given an earlier notice to quit.
Subsidized Residential Tenants
If you are a subsidized residential tenant on a month to month basis, you may be entitled to a 90 day notice under certain circumstances.
If you are in default of your rent payments or in violation of any terms of the lease, the new landlord can give you a three day notice requiring you to pay the rent or cure the default or vacate the premise. However vacating the premise will not end your obligation under the lease agreement. Similarly the new landlord can ask you to vacate within 3 days if you indulge in any illegal activity on the property or sublease the property to the former owner.
If you do not vacate after the expiry of the lawsuit, the new owner must file a lawsuit to get an eviction order against you. You cannot be summarily evicted. Similarly the new owner cannot do anything to prevent your access or enjoyment of the property. You will receive a notice from the court informing you about the filing of the lawsuit by the new owner. You can appear and fight the lawsuit.
Finding out if the property is in foreclosure
The best way to find out if the property is in foreclosure is to check at the local registry. In most jurisdictions, lenders often make an entry in the local registry when a property is being foreclosed on. Alternatively you can also obtain a credit report of the landlord and check if the landlord is regular on the mortgage payments. These are steps you can take before you enter into a lease. If subsequently the property is foreclosed on and you have to move out, you can sue the original landlord for the damages and loss you may have suffered because you had to vacate the property.