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Tenant Rights in Foreclosed Buildings

ID-100243367-300x199According to CNN.com, the number of foreclosures in 2009 reached an all-time high record. With such high numbers of foreclosures taking place, renters are often directly impacted. Despite the turmoil of a foreclosure, recent legislative changes provide tenants with several legal rights even if the ownership of a building changes hands.

Tenant Rights

Leases

Prior to 2009, a lease on a foreclosed house was legally invalid, since the mortgage pre-dated the lease agreement. However, the Foreclosure Act signed on May 20, 2009 changes these rules. For all foreclosures taking place after this date, the lease remains intact. This change allows tenants to remain at a rented residence for the entirety of the lease term.

In cases where a tenant is renting monthly without a lease, the law gives a grace period of 90 days. This gives such monthly renters the right to remain at the residence for up to three months after a foreclosure. The intent of these changes is to provide adequate time for renters to find new housing in the event of a foreclosure.

Evictions

The law also protects tenants against unreasonable evictions. In past cases involving foreclosure, the new owners of a rental residence have attempted to evict renters without just cause. The Foreclosure Act of 2009 makes this illegal. Instead, any rental owner seeking to evict a tenant must cite a specific, pre-approved cause for the eviction.

Examples of acceptable causes for eviction from foreclosed buildings include lack of payment or illegal activity at the residence. The transfer of ownership following a foreclosure is not sufficient cause by itself for an eviction. If a tenant is evicted without just cause, recourse can be sought in court.

Claims

Following a foreclosure, tenants have the right to file legal claims against the original owner of the residence. If, for example, a tenant is harassed or feels taken advantage of due to the foreclosure, a lawsuit can be filed in small claims court. As with all law disputes, the burden of proving wrongdoing lies with the tenant.

If a tenant successfully shows that their rights as a renter have been violated, they can be awarded monetary restitution. When awarded by the court, this money can cover application and rental fees. Often, the court will also order the original owner to pay any moving fees incurred due to the contract breach.

References

Image courtesy of hywards / FreeDigitalPhotos.net

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