By Elisa Shoenberger, 
While most headlines focused on the plight of homeowners facing foreclosure during the height of the housing crisis, tenants in foreclosed rental properties also suffered. Some people found themselves evicted from their rental units with little to no notice.
In fact, some companies seemed to profit off of the ambiguous situation that many tenants found themselves in. The Chicago Reader found that Pangea Real Estate starting in 2009, “has filed more cases than the next four landlords combined, at times accounting for as much as 20 percent of all eviction cases filed in the south and west side zip codes where its holdings are concentrated.” As a result of the crisis, there was the passage of the Protecting Tenants in Foreclosure Act, which was originally only active through Dec. 31, 2012, but has finally been permanently extended in 2018.
The foreclosure crisis and the subsequent act shed important light on tenant’s rights in foreclosure cases.
How do I find out if the property I’m renting is in foreclosure?
If you suspect that the property you are renting is in foreclosure, such as utilities not being paid that is the responsibility of your landlord, you can try to find out in a number of ways. Some counties have court cases online so you could look up your landlord (or their company) and see if they have a pending or completed foreclosure case. Not every county has this information available digitally, so you may have to go to the courthouse to request the paperwork.
What are my rights as a tenant when the property is sold?
Tenants have rights even if their property is sold. According to the Protecting Tenants in Foreclosure Act, in most cases, new owners must give renters at least 90 days' notice before they move out of the property. Before the act, renters could find themselves evicted after a few days of foreclosure.
However, if a tenant is “bona fide,” they may have the right to stay through the end of the lease. Charles Drennen, founder and managing attorney of Chicago Tenants Rights Law, explains that bona fide means that the former owner still owned the property when the lease agreement was made, the rent was near fair market value, and the lease was not between family members. However, there are exceptions to staying the length of the lease if the new owner is moving into the property or if there is no lease or an at-will lease, explains Will W. Sunter of Farr Law Firm. However, being behind on rent may be a hindrance or possible grounds for eviction.
Some jurisdictions will provide additional protections. For instance, Chicago passed the Keep Chicago Renting Ordinance, which makes provisions for relocation funds of $10,600 from the bank if the tenant decides to leave the property. Amounts available for relocation expenses may differ depending on the jurisdiction. Drennen says that some tenants may not want to live in a property owned by a bank and would be eligible for compensation to help with the transition. There are special provisions for people in Freddie Mac and Fannie Mae properties as well as people with Section 8 Voucher holders.
Check your local county or city to see if there are rules and regulations about rental properties in foreclosure.
Should I still keep paying rent?
While the property is in foreclosure proceedings, the rent should still be paid to the owner. However, once the property is owned by the bank or new owner, renters should stop paying rent to the former owner. However, it can be confusing how to pay after the changeover occurs, and they may be in limbo for a while. However, if a tenant wishes to remain in the property but is behind in the rent, the bank may ask for the back rent, which some tenants may not be in the position to do, explains Drennen.
Some jurisdictions, like Massachusetts, require new owners to provide written notice to tenants including contact information, building manager, and information about where the rent should be sent. If this information is not provided, the non-payment of rent is not considered a just cause for eviction.
Can I be evicted?
If the tenant cannot stay in the property for reasons stated above and stays past their 90-day window (possibly more depending on other ordinances/laws), the bank or other new owner can start eviction proceedings. The time to obtain an eviction can vary depending on the county or state.
When should I get an attorney?
Drennen recommends that people get an attorney if they have questions. Moreover, “the sooner you have legal advice, the sooner you are made aware of the process,” he advises. That way, people can know their options, determine what they want to do—whether it is possible to buy the property themselves, stay through their lease, or relocate—and have time to plan. People who try to ignore the situation may find themselves dealing with eviction from their rental property.
Moreover, if a tenant is subject to fraud, such as being renting a property by someone who does not own the property, they should also consider consulting an attorney.
