Though foreclosure statistics in the US have decreased over the summer, tenants should still be vigilant when it comes to renting properties. There are federal and state laws in place that protect the rights of tenants in the event that a residence is being foreclosed on. However, it only provides a short period of residency before you must vacate the premises.
There are an increasing number of tenants that are blindsided by the foreclosure process when a notice to vacate appears on their door. It has been reported that many property owners commit foreclosure fraud that trickles down to unsuspecting tenants.
Landlords essentially rent the unit out without giving proper notice to tenants about the foreclosure status. They collect security deposits and monthly rent in the pre-foreclosure stage as a means to gather money. The only issue with this is that tenants end up wasting their money and resources on moving into a property for which they only have 3 months to move out of.
Naturally, being prepared is the most idealistic way to combat against foreclosure fraud as a tenant. Here are some ways to do this:
Don’t Stop Paying Renter’s Insurance
When you find out that you’ll have to vacate the premises soon, it can be natural to find ways to accumulate the funds so you can move. However, by eliminating important services such as renters insurance, tenants put their possessions at risk. Though there are laws to protect tenants during a foreclosure, and the property owner is still paying for homeowner’s insurance, you still want to have that additional layer of protection, which renters insurance provides.
Continue Paying Your Rent
Another mistake tenants should avoid is neglecting to pay the rent. Again, it is understandable that you’ve been inconvenienced by the foreclosure; however, you’re only protected IF you continue to hold up your end of the rental agreement. Your landlord can easily evict you if you fall behind on rent giving you less time to prepare for your impending move.
Send a Copy of Your Lease to the Lending Company
Tenants need to make the lending company performing the foreclosure that they currently reside on the property. You can do this by either contacting them directly or by mailing a copy of your rental agreement. While this won’t stop the foreclosure process it does keep all parties involved so that they don’t try and repossess before your legally allowed timeframe to move out.
Do Not Ignore Court Papers
Should tenants receive court papers in the mail, they shouldn’t ignore them. If your name is listed on the papers you’re going to want to make sure that you attend the court hearing. If an answer is required on your behalf, you’ll want to contact the court clerk’s office in your county to find out how to effectively respond.
When attending foreclosure hearings, be sure to voice your need for time to stay while you find a new location to move into. Explain any extenuating circumstances you might have going on in your life. The judge is typically lenient and will let you know when you must move out.
Obtaining Your Security Deposit
At the time of your departure it is the responsibility of whoever owns the property at the time to provide you with your security deposit. Typically, they have 30 days to return this to you. When leaving, be sure to write a letter (send certified mail with return receipt request) to the landlord, new owner, and lending company to let them know where your new address is. If your security deposit is not returned within the 30 day timeframe tenants should immediately reach out to the county clerk’s office to find out the legal process for obtaining your deposit.
While foreclosures are certainly hard on property owners, it can also be an inconvenience for tenants who currently rent out the property. In the event that you are notified that the property is being foreclosed on, stay calm, know your rights, and take every step necessary to receive the time you need to relocate and to obtain your security deposit.