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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 http://www.sclegal.org/Home/Locations/tabid/211/Default.aspx.
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.
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