There used to be a federal law that protected tenants who faced foreclosure. But that law expired on the last day of 2014. There are still state laws though that protect tenants. It is crucial to remember that if the property being rented out is going into foreclosure, or if a notice has been given instructing a tenant to vacate after foreclosure, then said tenant should seek out a lawyer specializing in foreclosure.
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Here are some things that tenants need to know.
- Tenants should still pay rent and comply with the terms of the rental agreement or lease, despite the looming foreclosure.
- Once the foreclosure is done and a new landlord takes over, tenants should pay their rent to the new owner.
- Tenants are not required to vacate the property right after the foreclosure.
- Tenants should always receive a proper written notice before the action of foreclosure can begin.
- New owners should always have a “Trustees Deed” for the property to confirm they own the place.
- An indicator that a landlord is facing foreclosure is if the utility company cuts its services. Lack of funds to pay for services usually also means lack of funds to pay the mortgage.
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