Some tenants envision themselves getting thrown out without notice when they find out their apartment complex is in foreclosure. However, they aren’t totally at the mercy of lenders who initiate foreclosures. Laws generally require lenders to give renters several months' notice before requiring them to move out. People who buy foreclosed apartments also have to give renters a sufficient amount of time to leave.
The Protecting Tenants at Foreclosure Act allows renters to stay in their apartments until their lease expires, despite a foreclosure. Under the law, tenants who rent from month to month must get 90 days to move out. However, a new owner of a foreclosed apartment complex has the right to give any renter just 90 days to leave if the owner wants to live in a renter's apartment. The federal act is set to expire at the end of 2014, but states also have laws that protect tenants during foreclosures. Your state housing department can provide information on local laws.
Banks that foreclose on landlords may offer tenants cash if they agree to move out earlier than the law requires. That's because empty apartment complexes are sometimes easier for banks to sell. Tenants who get cash offers to leave should consider whether the amount offered is enough to cover moving expenses and a security deposit for a new apartment.
Recovering Moving Expenses
Landlords are legally obligated to deliver housing to tenants throughout the entire term of their lease. They fail to meet that obligation when they lose their apartment buildings in a foreclosure. As a result, some renters sue their former landlord to recover moving expenses. Renters also can sue to recoup any additional rent they pay for an apartment that's comparable to the one they had to leave due to a foreclosure. Nolo suggests such suits would go through small claims court.
It's tough to figure out if your apartment complex is at risk of going into foreclosure. Nonetheless, Bankrate.com warns renters that landlords may be having financial problems if their properties begin to look shabby and requests for repairs go unanswered. In such cases, consider looking for a new place to live before your lease expires. Otherwise, start socking away extra cash in case you have to move unexpectedly following a foreclosure.
- Jupiterimages/Comstock/Getty Images
- The Maintenance Fees in Buying a Condo vs. Renting an Apartment
- Can My Subdivision Prevent Me From Leasing My Home?
- How to Relocate With Bad Credit
- Things to Consider When Renting a House
- What Can You Do if Your Mortgage Company Will Not Work With You?
- "What Does ""Income Restricted Apartments"" Mean?"
- I Am Renting a House in Foreclosure. Can I Rent or Buy it From the Bank?
- When You Rent a House Do You Pay Taxes & Homeowners Insurance?