Renter’s Rights in Foreclosure: What Happens if the Property is Sold?


Foreclosure can be a distressing experience for homeowners. But what happens to renters living in a property that is foreclosed upon? Do they have any rights? And what happens if the property is sold? In this article, we will explore the rights of renters in foreclosure situations and discuss the implications of a property sale.

The Protecting Tenants at Foreclosure Act (PTFA)

In 2009, the U.S. federal government passed the Protecting Tenants at Foreclosure Act (PTFA) to provide certain protections to renters living in foreclosed properties. This act aims to ensure that tenants are given a fair amount of notice before being forced to vacate the property due to foreclosure.

Tenant Protections Under PTFA

The PTFA offers the following protections to renters:

  1. Notice Period: Tenants are entitled to a minimum of 90 days’ notice before being required to vacate the property. This notice period allows renters to search for new housing options and make necessary arrangements.
  2. Lease Protection: If the tenant has a lease agreement that is still in effect, the new owner of the property must honor the terms of the lease until it expires. This provision ensures that tenants do not face immediate eviction following a property foreclosure.
  3. Month-to-Month Tenants: For renters with a month-to-month tenancy, the new owner must provide them with a written notice to vacate at least 90 days in advance. This gives tenants ample time to plan their relocation.
  4. Bona Fide Tenancies: Even if the lease or tenancy is not in writing, the PTFA still offers protection to bona fide tenants. They are entitled to the same 90-day notice period before being required to move out.

State and Local Laws

In addition to the PTFA, several states and local jurisdictions have enacted their own laws to protect renters in foreclosure situations. These laws may offer additional rights and longer notice periods than those provided under federal law. It is crucial for renters to familiarize themselves with their state’s specific regulations.

What Happens if the Property is Sold?

Once a foreclosed property is sold, the new owner becomes the landlord and assumes responsibility for the management of the rental units. The rights and obligations of tenants should generally remain the same, except for a few rare circumstances.

Existing Lease Agreements

If you have a lease agreement that is still valid, the new owner must honor the terms outlined in the lease until it expires. This means that there should be no immediate changes to the rent amount, lease duration, or any other conditions specified in the agreement.

Month-to-Month Tenancy

For renters with a month-to-month tenancy, a change in ownership does not automatically terminate the tenancy. The new owner must continue to provide written notice and follow the appropriate legal procedures if they wish to end the tenancy.

Security Deposits

Typically, the security deposit is transferred from the previous owner to the new owner. Renters should ensure that this transfer is documented and that they receive acknowledgment of the security deposit transfer. The new owner should also comply with any state laws regarding the handling of security deposits.

Eviction Process

While the PTFA and state laws provide protections for renters, it is still possible for new owners to pursue eviction if certain conditions are met. Nonpayment of rent, violation of lease terms, or other just causes can be grounds for eviction. However, proper legal procedures must be followed, including providing appropriate notice and filing an eviction lawsuit if required.


Renters have rights when residing in a property that is undergoing foreclosure. The PTFA provides certain protections, such as a 90-day notice period, lease protection, and rights for both lease and month-to-month tenants. Additionally, state and local laws may offer additional safeguards. Once the property is sold, existing lease agreements should generally be upheld, and month-to-month tenancies continue unless proper notice is given. It is essential for renters to understand their rights and seek legal advice if needed to ensure their rights are protected in foreclosure situations.

Related Articles

Table of Contents