FindLaw KnowledgeBasePublished: 2010-03-18
Imagine returning to your home to discover a note on the door that reads: “THE BANK HAS FORECLOSED ON YOUR LANDLORD’S PROPERTY AND NOW OWNS IT – YOU WILL BE REQUIRED TO VACATE YOUR HOME IMMEDIATELY.” Countless Americans have faced similar situations, situations which amount to illegal eviction.
After a landlord’s property has been foreclosed upon, residential tenants have many rights which can be asserted against illegal eviction, personal harassment and neglect of their property.
The federal Protecting Tenants at Foreclosure Act generally allows residential tenants to remain in their homes for 90 days after their landlord’s property has been foreclosed upon. Tenants may also remain in their homes for the remainder of their lease, if that time period is longer than the prescribed 90 days. Eviction in violation of these allowances is illegal.
The only situation in which tenants would not be allowed the 90 day term or remainder of their lease is if they were to be evicted on legal grounds, such as failure to pay rent. Additionally, there is an exception which allows a new owner to evict a tenant after 90 days even if their lease term is longer than 90 days, if the new owner will be occupying the tenant’s unit as a primary residence.
There are additional situations in which a tenant may not be evicted at all. For example, if a tenant lives in a building with five or more apartments and the tenant is at least 62 years old or physically disabled, the tenant cannot be forced to move, period.
Notice and “Cash-for-Keys”
After a landlord’s property has been foreclosed upon, the bank or new owner is required to furnish tenants with a “Notice to Vacate,” which supplies the information that tenants will be given 90 days or until the end of their lease to vacate. The 90 day period cannot begin until after the foreclosure process has been completed.
Banks, realtors and new owners may offer tenants to move out more quickly than the 90 day period or term of lease allowed, but any “cash-for-keys” offers must adhere to strict guidelines. Many tenants have been offered illegal offers that are two low, or are illegally offered “instead of” the return of a tenant’s security deposit. A security deposit must always be returned unless good cause, like extensive damage to the property, exists for the owner to retain it.
If a tenant is offered money for vacating their home early, the tenant must be offered the higher of two months’ rent or $2,000. This means that a tenant must always be offered at least $2,000 and a greater offer may be required. The tenant may also be offered two times the amount of their security deposit, plus any applicable interest. However, the tenant cannot, under any circumstances, be forced to accept a “cash-for-keys” offer. As accepting such an offer will mean giving up one’s place of residence, a tenant should only accept a “cash-for-keys” offer if the money is enough to adequately move and if the tenant has a new residence to move to.
While a foreclosure is being processed, the original landlord owns and is responsible for the property. After the foreclosure process is complete, the bank or a new landlord owns and is responsible for the property. Whoever owns and is responsible for the property will be the one collecting tenants’ rent payments and is the one responsible for repairs, maintenance and any utility payments specified under the lease.
The new owner, whether that be the bank or a new landlord, is responsible for any repairs, maintenance or utility payments that the original landlord was responsible for. If the new owner stops providing these services, it is important to contact the authorities or an attorney, as tenants are entitled to the services specified under their lease, even after the property has been foreclosed upon.
The new owner is also responsible for returning a tenant’s security deposit, once the tenant has vacated the property. An attorney or the authorities can also help tenants get their security deposits back, if the new owner refuses to return their full value without just cause.
For Further Reference
If your landlord’s property has been foreclosed upon and you are being harassed or if your new landlord is not upholding required obligations, please contact in experienced attorney.