Tenants in Foreclosure Cases

When the plaintiff starts a foreclosure case against the owner of your home, the law says that the plaintiff must tell the tenants within 10 days. You may find out about the case by seeing a notice posted on the door to your building or the plaintiff may give you a copy of the foreclosure Summons and Complaint. Do not worry if your name is on the papers. This does not mean that you have to move out. Many things can happen:

• The owner may settle the case and keep the property
• The bank may not be able to prove its case
• The case may take a very long time, often even a year, and you may move before it is over
• The new owner may want to keep you as a tenant
• You may have the right to stay anyway

The point is, you don’t have to do anything right now.

During the foreclosure case, the owner is still in charge of keeping your home or apartment in livable condition and still collects rent and can start a case in Court against you. But, you can’t be evicted without a court order.

Whoever buys the building at a foreclosure sale can’t make you move out right away. The law says that the new owner (or the bank if the bank still owns the building) has rules to follow if the new owner wants to evict you. Whether the new owner wants to evict you or not, you should get a notice from the new owner. After the sale, you have to pay your rent to the new owner.

 

Eviction Rules

After a foreclosure sale, federal law says that the new owner or the bank must give you a written 90 day notice to move out before starting a case to evict you in Court, even if you don’t have a lease. If you have a lease that has more than 90 days left on it, you can stay until the end of the lease unless the owner wants to live in your apartment. If the new owner wants to live in your apartment, he or she can send you a 90 day notice telling you to move for that reason. But, the 90 day rule does not apply to rent-regulated tenants, like rent-controlled or rent-stabilized tenants. Their rights are the same before and after the building is sold in foreclosure to a new owner. This includes the right to a renewal lease.

If you don’t move out after a 90 day notice, the new owner can start a case in court to evict you. This case is called a holdover. The owner’s court papers must have any notice he or she must give you, plus the 90 day notice and a certified copy of the new deed attached or you can ask that the court to dismiss the case by making a motion or order to show cause. But, even if the case is dismissed, the owner can start it again. Read more about Evictions to learn more.

If you are evicted because of a foreclosure case, the court records about your eviction must be hidden from the public (sealed).