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New Law Gives Renters Protection During Foreclosure

On May 20th, important protections for tenants living in foreclosed properties were signed into law by President Obama. The renter protection provisions took effect immediately and expire at the end of 2012.

S. 896 contains the following key renter protections:

• 90-day pre-eviction notice to tenants whose homes have gone into foreclosure.
• The rights of tenants to remain in their homes for the terms of their leases. (However, if the new owner will live in the home, leases can be terminated subject to the 90 day notice.) • Tenants with Section 8 vouchers able to remain with both their lease and rental assistance payments intact, subject to the rights of the purchaser at foreclosure who wants to occupy the home after 90 days notice. Currently, in most states, renters get little or no notice to vacate their homes upon their landlords' foreclosures. The new federal law will not preempt state laws that provide a greater level of renter protections at foreclosure. Renter’s Rights Information for Renters Impacted by Foreclosure What to do when your landlord is foreclosed on:
• Ask your landlord to allow you to end the lease early and move out.
• Give reasonable notice.
• Give your landlord contact information so he/she can send you your security deposit.
• Make sure you put any agreements in writing so you can consult the documents later if any misunderstandings arise.
• As a tenant, you are required to comply with the lease agreement until it ends or has been lawfully terminated. However, the foreclosure process may impact your rights as a tenant. Therefore, if you have received a notice that your landlord is facing a foreclosure of the property you are renting, contact a Legal Assistance provider or a private attorney who handles landlord/tenant matters, immediately. Contact a legal assistance provider:
• If you receive court papers or are concerned about your legal rights.
• Have a complaint about your landlord or need advice about recovering a security deposit. • Have questions about the rights and obligations of landlords and tenants A list of South Carolina Legal Services Offices can be found at RENTER’S RIGHTS After Foreclosure
• If you have to move before your lease expires, you may be able to sue your landlord for monetary damages. However, this can be costly, time consuming, and it may be difficult to collect money from a landlord who is in foreclosure.
• You can try to recover your security deposit from your landlord once you move out of the home if they do not return it. Again, it may be difficult to collect the money from a landlord who was foreclosed on.
• If the bank or new owners contact you directly, negotiate with them for a move out date that suits both of your needs.
• The new owner may also offer you “cash for keys” if you leave the property voluntarily without going to court.
• Do not pay rent to the new owner unless you have reached a written agreement concerning your right to remain in the property.
• Even if you cannot reach an agreement with the new property owner, only a court can order you to vacate the property. The new owner does not have the right to change your locks or force you to leave without a court order.
• If you do not have an agreement with the new owner, and you do not vacate, he/she may file a suit called an “Unlawful Detainer,” asking the court to evict you.
• The new owner may also ask the court to award damages if he/she has lost money because you have not vacated the property. However, between foreclosure and court- ordered eviction, you have the right to remain in the property.
• Use the time between foreclosure and the court order to find new housing and move.
• The entire process of foreclosure and eviction of the house’s occupants usually takes 2-3 months.

The information contained herein is provided for general information purposes only and is not intended to convey a legal option nor legal advice for any particular case or situation. Nothing in this website shall create an attorney-client relationship. Nothing sent to this office via e-mail shall constitute an attorney-client relationship. Nothing contained in this website shall be construed to be a guarantee or prediction of result.

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