Renters have rights when owners lose building to foreclosure
If you're a fan of disaster movies (and who isn't?) you already know that being in front of an oncoming tsunami wave is never a good thing. And, yet, for many renters around the U.S., this is exactly the position they are now in.
"We're at the front end of that wave...Are we concerned? Absolutely," Raphael Bostic, of the U.S. Department of Housing and Urban Development, tells the Washington Post.
By one recent estimate, as many as 75 percent of multifamily buildings could have problems refinancing, says the paper. Already, the number of foreclosures against multifamily rental and co-op homes is up in Chicago, Los Angeles, New York and other large urban settings, and also in smaller cities and towns such as Des Moines, Iowa and Lexington, North Carolina.
But there is some good news for renters: Last May, President Obama signed into law something called the "Protecting Tenants at Foreclosure Act of 2009." In a nutshell (maybe the only structure not facing foreclosure!) the law says a tenant's lease "survives" the foreclosure. And, what does that mean? Simply put, it means the tenant can stay put till the lease expires!
Now, there are some exceptions (you know, the old "'the devil is in the details" rule), but, even for these, some legal experts and websites suggest going to small claims court to recover money from your otherwise doomed former landlord for breach of contract.
So, that wave may, indeed, be coming, but you may be able to stay afloat.