Even real estate professionals are often surprised to learn that many foreclosure-related evictions impact not homeowners but tenants who are renting or leasing. That’s because when a rented or leased home enters foreclosure, banks and landlords have no legal obligation to inform the tenants, so they are usually the last to know that there is a problem. Many discover their eviction only when they come home to find an official eviction notice from the lender posted on the door, or when the sheriff shows up to put their belongings in the street.
These unfairly evicted tenants usually also lose cash security deposits because landlords – who are already in financial trouble with creditors – pocket rent money and deposits and disappear. Tenants have to try to come up with enough cash to start over, which means more deposits and first and last month rent payments in addition to actual moving expenses.
In the city of Los Angeles, for example, 60 percent of residents rent or lease their homes – and are at risk for eviction if their landlords get foreclosed on by lenders. Last year approximately 40 percent of all single family home foreclosures in Los Angeles involve rented or leased property, and similar situations exist in towns and cities all over the nation.
To avoid eviction if you are renting or leasing, stay informed about your landlord’s mortgage situation. One way is to ask for copies of the landlord’s mortgage statement – if he or she is willing to share that information on a regular basis. But another way to know if a foreclosure is about to happen – so you take steps to prepare for it and get any money you are owed back before it happens – is to check the local courthouse records.
When a foreclosure proceeding begins, lenders file documents with the courthouse which are available for public viewing. Keep track of those by searching the courthouse files by your landlord’s name, his or her company name, and the address of the property where you live. If nothing is there then you are probably fine, but if you find that someone has started to push for foreclosure, start planning ahead fast. Foreclosures usually take as little as 60-90 days and you will need as much time as possible to pack, move, and get settled somewhere else.
