What Happens to Tenants When the Property They Are Renting Is Foreclosed?
by: Georgia Legal Services Program®
Q.
The apartment complex where I live changed owners last month. The new owners have notified all tenants that the old leases are cancelled and have given us new leases to sign within thirty (30) days or we must vacate the units. The new leases have higher rents and different rules. I had five more months on my old lease. Can the new owners do this?
A.
Generally, a person who buys rental property does so subject to any existing leases with current tenants. This does not apply to purchasers at a foreclosure sale. This means that the new owner has purchased your lease and must abide by your lease's terms. Any change or modification to the existing leases, which the new owner wishes to make, must be done in accordance with the terms of the existing leases. Unless the existing leases contain provisions allowing the owner to terminate or modify, they may not be changed prior to their expiration. If you want to remain a tenant under your lease, you should notify the new owner in writing that you expect him to honor your current lease. On the other hand, the tenant can consider the new leases an offer of new tenancy and agree to the terms and conditions of the new lease by signing it. If signed, the new lease will control the terms of the new landlord tenant relationship.
Q.
My apartment owner failed to make mortgage payments and the property has been foreclosed, what will happen?
A.
A tenant who remains in rental property after the owner has lost title to the property due to foreclosure becomes a tenant-at- sufferance. The lease between the tenant and the original owner/landlord will, in most cases, be terminated by the foreclosure sale. If the purchaser at the foreclosure sale wants the tenant to vacate, he must first demand possession of the property and, if refused, file a dispossessory warrant. The purchaser can choose to become a landlord, either by offering a new lease or accepting payment under the prior agreement. A purchaser at foreclosure who accepts rent from existing tenants creates a tenancy-at-will which he can be terminated with sixty (60) days notice and which the tenant can terminate with thirty (30) days notice.
A tenant residing in property that is threatened with foreclosed should attempt to contact the attorney handling the foreclosure to determine if the tenancy will continue. If a tenant does not receive assurances of continued tenancy from the foreclosure attorney, the tenant may argue that the lease was terminated by the pending foreclosure. A tenant who becomes aware that his landlord is facing foreclosure might want to consider doing the following:
Check the local newspaper which carries the legal notices and see if the property is being advertised for foreclosure sale.
Write to the landlord asking for information on the status of the mortgage. You may want to consider asking the landlord to let you out of your lease. If your landlord agrees, make sure to have him put it in writing.
If the property is being advertised for sale, the legal notice should contain the name and address of the party foreclosing on the property. You may wish to write to the party intending to foreclose, tell them that you are renting the property, explain your situation, and that you would like to be notified of what happens with the property.
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LegalAid-GA.org provides general information only. This is not legal advice and cannot replace legal advice. You can get legal advice only from a lawyer. Deadlines are extremely important in most legal matters. You may lose important legal rights if you do not hire an attorney immediately to advise you. Viewing this web site or sending an e-mail message through this web site does NOT create an attorney-client relationship.
Copyright and Use Notice
This material is copyrighted by the authoring organization or individual. Legal information can change rapidly. Provided links are kept updated, permission is given to link to this material from a nonprofit, court or government website. Website material may be printed, copied and distributed only in its original format for non-commercial, informational purposes. The material may not be altered from its original format. Reproducing the material to promote a commercial purpose is expressly prohibited. Commercial enterprises are expressly forbidden from linking to our material or using our material in other ways. Legal Aid and GLSP are not liable for the distribution of out-of-date material or links. To inquire about appropriate use of this material, please contact 404-524-5811.
Information Not Legal Advice
LegalAid-GA.org provides general information only. This is not legal advice and cannot replace legal advice. You can get legal advice only from a lawyer. Deadlines are extremely important in most legal matters. You may lose important legal rights if you do not hire an attorney immediately to advise you. Viewing this web site or sending an e-mail message through this web site does NOT create an attorney-client relationship.
LegalAid-GA is a project of the Atlanta Legal Aid Society, the Georgia Legal Services Program and the Pro Bono Project of the State Bar of Georgia. This website was produced with funding from the Legal Services Corporation.
