Pursuant to the new federal law "Helping Families Save Their Homes Act of 2009" signed into law by President Obama this week, current tenants of foreclosed homes will now receive at least a 90-day notice to terminate. This 90 days would be given AFTER the lender or buyer of the property acquires title through the foreclosure sale.
If a tenant has a one year lease in place, however, it appears that this the tenant can stay in the premises until the remaining lease term ends. I would think that the new lender/owner would negotiate the remainder of the lease and would be receiving the monthly rental payments from that point forward.
I don't know how this will all play out, but I believe the "Cash for Keys" negotations will really be stepped up so that the lenders can get the properties onto the market as soon as possible.
This should definitely take some of the "panic" away from those renters who come home to find the "Notice of Trustee Sale" posted on their front door.
I will also suggest to anyone looking for a rental... make sure you have a Realtor check the current status of any future house you may rent. Although this is not fullproof, we can look up tax records to see if the property is in pre-foreclosure, or the potential for the property to be a foreclosure. Unfortunately, there are still people out there that are scamming unsuspecting renters.
For more information about the Foreclosure timeline... visit my article of 8/7/08, "My House is in Foreclosure! What happens next?"
(Per CAR Legal, this new "90-day notice requirement applies to foreclosures of a federally-related mortgage loan or residential real property, except for properties under rent control, rent-subsidized programs (such as Section 8), or other state laws that provide additional protections for tenants." ) This law expires on December 31, 2012.
If a tenant has a one year lease in place, however, it appears that this the tenant can stay in the premises until the remaining lease term ends. I would think that the new lender/owner would negotiate the remainder of the lease and would be receiving the monthly rental payments from that point forward.
I don't know how this will all play out, but I believe the "Cash for Keys" negotations will really be stepped up so that the lenders can get the properties onto the market as soon as possible.
This should definitely take some of the "panic" away from those renters who come home to find the "Notice of Trustee Sale" posted on their front door.
I will also suggest to anyone looking for a rental... make sure you have a Realtor check the current status of any future house you may rent. Although this is not fullproof, we can look up tax records to see if the property is in pre-foreclosure, or the potential for the property to be a foreclosure. Unfortunately, there are still people out there that are scamming unsuspecting renters.
For more information about the Foreclosure timeline... visit my article of 8/7/08, "My House is in Foreclosure! What happens next?"
(Per CAR Legal, this new "90-day notice requirement applies to foreclosures of a federally-related mortgage loan or residential real property, except for properties under rent control, rent-subsidized programs (such as Section 8), or other state laws that provide additional protections for tenants." ) This law expires on December 31, 2012.
Stefan West, Broker
Cynthia Nemelka, Realtor
Skylar Lewis, Realtor
