Sunday, October 31, 2010
Foreclosure Rights of Tenants and Landlords
The rights of Tenants and Landlords in the foreclosure setting is an issue that I see arising more and more these days. Accordingly, I thought I would take the opportunity to provide an overview of the law. Please note that this is WASHINTON LAW as it currently stands, however, each state has differing laws, laws are subject to change.
Federal Law – Protecting Tenants at Foreclosure Act of 2009
Rule- the new owner of the foreclosed home must notify the tenant AT LEAST 90 days before evicting the tenant. (this law is currently set to apply until 2014).
Washington Law – RCW 62.24.143
The Washington Law requires the foreclosing party (lender or trustee) provide written notice to the tenant before the foreclosure sale. This notice must explain that the sale may be held 90 days or more after the date of notice; and state that the person who buys the home is required to provide at least 60 days notice before evicting the tenant.
So which is it? A 60 day eviction notice or 90 day eviction notice.
As you can see, there is a conflict in the federal and state laws. As such, the purchaser of the property at a foreclosure sale will be required to provide the renters 90-day notice prior to eviction because of the Federal Law.
How does the new law affect a Tenant’s current lease?
** UNLESS the new owner is going to move into the property, the tenant can stay in the property until the lease ends!! (**this is huge- if the property reverts back to the bank, the tenant can stay in the home until the lease expires!)
** This currently applies to ALL LEASES entered into anytime prior to the transfer of title at foreclosure (the banks argued that this should not apply to leases unless they were entered into before the notice of default and notice of trustee sale).
Who does the tenant pay rent to?
Rent should be paid to the new owner post foreclosure. If the tenant has not been provided with payment information, then tenant should save the rent money until it is clear how payment should be made.
There are obviously some issues that may not be touched on in this post, but I hope it has provided a general overview that will assist you make the most of an abnormal situation.
For more information on your rights in Foreclosure or Short Sales, consider contacting a Seattle Foreclosure Attorney.
Weitz Law Firm, PLLC
5400 Carillon Point, Bldg 5000
Kirkland, WA 98033
at 3:19 PM