Seeking Justice Together

Understanding Tenants’ Rights During a Foreclosure

| Mar 22, 2021 | Uncategorized |

Tenants living in rentals in Florida have the expectation that as long as they pay their rent to their landlords, they can live in their homes. They understand that if they don’t pay their rent, they may end up evicted and kicked out on the street. Tenants should also think about what happens if their landlord doesn’t or can’t pay the mortgage for the home, forcing it into foreclosure. If tenants find themselves in this position, they may worry that they’ll end up on the street.

What rights do tenants have if their landlords go through foreclosure?

In 2009, Congress passed the Protecting Tenants at Foreclosure Act. This Act allowed tenants to stay in their homes even if their landlords were in foreclosure on those homes. Before the Act passed, a foreclosure erased all existing leases on a home. Renters were often tossed out into the street without warning because they never knew that the homes they were living in had been foreclosed upon. The Act expired in 2014, and the Florida legislature ended up passing its own version of the Protection Tenants at Foreclosure Act, but it didn’t give tenants as much protection as the previous act. On May 24, 2018, a permanent extension of the PTFA was signed into law, providing tenants living in foreclosed homes with permanent protection. The Act does not affect states that provide more generous protections, so the federal protections should apply in Florida.

Thanks to the Act, renters can stay in their homes while their landlords go through foreclosure defense or through the foreclosure process. If the new owner wants to make the residence their primary residence, they must give the existing tenants 90 days to vacate the property or allow them to live out the rest of their lease. If tenants live in a multi-family residence going through foreclosure, they’ll most like have to start paying rent to the lender. The lender needs to make this clear to the tenants. Some people make “cash for keys” arrangements with the new property owner. With this arrangement, the new owner pays the tenant a cash sum for them to move out early.

Who can people turn to when dealing with foreclosure issues?

Going through a foreclosure is tough on everyone. People dealing with this issue may benefit by working with attorneys who have experience with this type of law.