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Q.

How Long can Tenant Stay in Foreclosed Property?

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1

2 months

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Before I tell you how long can tenant stay in foreclosed property, let me tell you about how foreclosure happens. The house can be sold in a sheriff's sale if your landlord defaults on a mortgage debt and doesn't reach an agreement with the lender. Although it's not always the case, the buyer is typically the lender. State law determines whether a tenant can remain in a repossessed home.

How Long can a Tenant Stay in a Foreclosed Property?

The situation depends a lot on the specific facts:

  • Whether the tenant has a written lease, 

  • How the title transfer happened, 

  • Whether eviction laws of the local/state jurisdiction apply, and 

  • Whether the buyer of the foreclosed property intends to use it personally.

If a property is sold in execution of a debt, the new owner would generally have to follow due process of law to evict existing occupants. If a lease exists, that may give the tenant some protection till its expiry, or until a court orders eviction.

But courts tend to favour the rights of the mortgage creditor or purchaser once legal foreclosure or execution is complete, unless there are specific contractual or statutory protections for the tenant.

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