How Foreclosure Affects Tenants and Renters
As a renter you may think that not owning a home will protect you from foreclosure fallout. However, an estimated 40 percent of households facing eviction due to foreclosure are rentals.
Renters have some protection against eviction under the Foreclosure Prevention Bill signed by President Obama, May, 2009, which requires that new owners of a property must allow tenants to remain in the home as long as the tenants pay their rent on time. Renters will be able to stay until the end of their lease, or will get at least 90 days notice if they do not have a lease or if the new owner intends to reside in the home.
However, there is still the issue of getting your rent deposit back from the original owner. The new foreclosure prevention bill only protects your right to say in the foreclosed property for the rest of your right to stay on a foreclosed property as outlined above. It does not guarantee the return of your deposit. Without these funds being returned it may be cost prohibitive to move to a new location.
Don't put yourself in a situation where you could lose your rental deposit because you didn't know if the property you are renting is going into foreclosure or if the landlord has a history of bad debt attached the home you're living in!See The History of Your Rental Property