(Note – Update – Oct 2014 — the business referenced in this article has apparently gone out of business. The former link that was here is now removed as the domain has become a foreign website.)
Sometimes a renter ends having to buy a home fast. Often they are people who had been renting homes with plans to buy in the future. But while in their current rental lease they became victims of a landlord who was failing to pay the mortgage, even though the renters were paying their monthly rental payment to the home owner.
Under a new federal law that took effect May 20, 2009 the foreclosure bank generally would have to honor the lease of bona-fide tenants.
But one of the exceptions to the new law is if the bank sells to a buyer who will use the home as a primary residence, the bank can then furnish a 90-day notice of eviction to the tenants.
If a home is foreclosed on and there are renters, a possible liability of the landlord, (if the tenants are evicted) would be for the landlord to be held liable for the tenants’ monetary damages, such as higher rent and moving expenses, due to the early termination of their lease.
These are issues that both a tenant and a landlord should consult with an attorney about to see how the new law will specifically affect them.
(Note – we have no affiliation with the lemonlandlord website.)