What Happens if I’m Renting and My Landlord Goes into Foreclosure?

What Happens if I’m Renting and My Landlord Goes into Foreclosure?

 

In the past, if you were renting and your landlord went into foreclosure, you could be immediately forced out of the home. However, times have changed and new laws make it possible for renters to live out their lease in most cases. In other cases, they may be able to recover costs from the original landlord.

 

Talk with Your Landlord

 

If your landlord goes into foreclosure and actually tells you about it, you may need to discuss other things, like utilities. If your landlord was taking care of the utilities as part of your rental agreement, you need to find out if that is still going to happen. Someone who isn’t making their house payment with your rent money may not be paying the utilities either. Try to get as much information as you can so you are able to plan ahead for the safety of your own family.

 

Thank You Obama

 

In 2009, President Obama signed an act to protect tenants from having their lives turned upside down if their landlord went into foreclosure. The Protecting Tenants and Foreclosure Act of 2009 was designed to give tenants a chance to recover from what to them may be an abrupt change.

 

The act basically states that tenants can live out their original lease undisturbed. Since some tenants live on a month to month lease, this could have meant that they had 30 days to move out. However, the act gives them 90 days to find a new home. The only exception is when someone buys the property with the intent to live there. In such cases, the tenant has 90 days, regardless of whether they live on a month to month lease or not.

 

Recovering Costs

 

Aside from potentially having to deal with a higher rent, moving itself is expensive. You may need to travel to investigate a potential rental, pay application fees, and rent a truck to move your furnishings. Renters can sometimes recover some of those costs by taking their original landlord to small claims court.

 

Naturally, while you are living in the rental, all of the details of the lease and your responsibilities still stand. It may be even more important to follow the lease to the letter in order to avoid being evicted because of your own folly. If this happens, you won’t be able to recover costs from your former landlord because you will have to move due to your own behavior and the details of the lease. Talk to a real estate agent about your opens if you do need to move. It may just be time to buy your own home!

Advantages to Buying a Foreclosed Property

The Garden State has the highest percentage of foreclosures among mortgaged homes in the country, according to CoreLogic. Another tough statistic to swallow: New Jersey is the state that takes the longest to complete a foreclosure, just over 3 years. Not all parts of NJ see the same tough housing market, but as a whole, the market isn’t the best for sellers. In fact, real estate experts say that if you want to buy a home, head East. That’s where the buyers market is.

While things are getting better for sellers, NJ remains a buyers market. So, if you’re looking to buy, this post is for you. With so many foreclosures in NJ, it’s likely that you’ll come across a few that are for sale that you really like. Don’t be dissuaded by the negative perception of buying a foreclosure. Sure, it does take longer than a traditional sale, but there are plenty of benefits, too.

Here’s why.

Reduced Price

With a foreclosure, you’re buying the home from the bank so it will be reduced in price. A lowered price means many good things: a lower down payment, less money brought to the table, a more affordable monthly payment and so forth. With a foreclosure, you could potentially land yourself a bigger, better home for the same price as a smaller, more modest home in a traditional sale.

One thing to think about: with so many forclosures in the NJ market, these properties are actually setting the market value. So, it’s possible that even a foreclosed property will be closer to fair market value than you think.

Less Competition

Many buyers won’t consider a foreclosed home because they don’t have time to wait and they prefer a clean and simple sale (not saying that foreclosures can’t be). Still, not every buyer considers a foreclosure, so keeping your options open means that you may compete against a smaller market and won’t have to place such high bids.

Instant Appreciation

A foreclosed home is always sold at a discount compared to other properties in the area and will likely appreciate as soon as you set foot into it. And, imagine what a few fixer uppers can do for the place! Some buyers plan on living in their new home for the long term, but others take the profit they make and use it to purchase something else.

Foreclosures aren’t for everyone, but if you have time, patience and some handiness skill, they are worth considering!