Renters are being affected by the spate of foreclosures. Besides homeowners facing foreclosure, a growing number of my rental clients are being evicted from those same homes being foreclosed. They have discovered that they are not immune from the financial fallout of the beleaguered real estate market.
With mushrooming foreclosure filings it's not just just owners losing their homes - in many cases these homes are also rental properties and because lenders are not usually interested in managing rental properties, tenants are finding themselves displaced in the process. Not only are tenants being forced to vacate, but because they typically have no knowledge of the landlord's deteriorating financial situation, they are often taken by surprise.
Landlords Not Communicating With Their Tenants
Frequently, renters find out that their rental home has been foreclosed on when they are warned that an eviction notice is forthcoming from the lender. This notice gives the renter a chance to voluntarily vacate the premises before eviction proceedings take place.
Even if the renter's lease isn't up for several months, the tenant may get less than 60 days to vacate the premises once evicted - in most states a foreclosure makes a lease obsolete. Since the lease signed by the renter is no longer in effect, the lender (and new owner) is not obligated to perform any maintenance or continue any other services the tenant may be entitled to, except for continuing basic utilities such as electricity and water.
While it is nearly impossible to know if your landlord is having money problems, when repairs start getting ignored or if your landlord becomes unresponsive to your needs, you may want to consider the possibility he is being foreclosed on before signing a new lease.
