As of late, it’s become quite common for renters to suffer the consequences of foreclosure. Many of my clients, for example, are renting homes from landlords who are being foreclosed upon. But a law passed by the Obama Administration in May 2009 may provide some relief to renters in this predicament. The law, entitled the “Helping Families Save Their Homes Act,” provides that a formal lease will survive foreclosure, except that a purchaser of the foreclosed property who seeks to occupy it as his primary residence may prematurely terminate the lease upon 90-days notice to the tenant.
In Florida, residential properties are being foreclosed almost daily. The process is often long and drawn out, and months may pass between a lender’s initiation of a foreclosure action against your landlord and the sale and/ or reoccupation of the property that you are renting. If you’re in this position, you may be wondering what to do in the meantime. I usually advise my clients to remain on the property but use the extra time to find a new home and, further, to continue to pay rent. Chances are that even if you pay your rent on time, you will be evicted upon the completion of the foreclosure proceeding. But if you do not pay your rent, your landlord may file an eviction action against you. And while the eviction process will be rendered moot if the property is foreclosed and sold before you are evicted, just the fact that such an action was filed will negatively affect your credit and thus make it harder to find a new home.
If you would like more information about this topic, you may either post a comment to this blog, contact me, a Florida Real Estate Attorney, by email, or call me at (954) 458-8655 and I will be happy to answer your questions. I offer a free initial consultation.