As a renter, you do not have the same stability in your housing as someone who owns their home. You are at the mercy of the landlord, who could decide at any time to make changes to your lease. There is also the potential for you to get wrapped up in a foreclosure action against your landlord.
In a foreclosure, you have no responsibility for the mortgage, but it will impact you. The Tenant Resource Center explains a foreclosure may occur without you being aware until later in the process.
A foreclosure starts when your landlord missing a mortgage payment. The lender can file action right away. The law does allow a 20-day grace period in which your landlord can make the missed payment or provide a valid defense against the action.
However, if that does not happen, then the lender can move on in the process. The next step is a court makes a judgment for foreclosure. At this point, the redemption period begins where your landlord has the chance to bring his or her account current. It could be as short as two months or as long as a year.
If the landlord fails to correct the situation, the property goes to a sheriff’s sale. A new owner may take possession or the bank will.
During a foreclosure, it is your responsibility to continue paying your rent. You can face eviction if you stop paying. In most cases, you will continue to pay your landlord and the landlord will retain responsibility for repairs until the sheriff’s sale occurs.
There is the chance the court may appoint a receivership. At that point, you would get a notice to pay rent to a different party.
After the sale, the new owner can issue you a 90-day notice if he or she no longer wishes to rent to you. Your lease will remain valid throughout the process until you get the 90-day notice.