In New York State almost 56% of the homes facing foreclosure are rental properties. This means that every year thousands of New Yorkers are faced with a foreclosure situation they were not aware of! If you find yourself in this situation, there are several rights and obligations that you must meet.
Here is a list of the top 6 things you must know if you find yourself in a foreclosure rental property:
1. At the start of the foreclosure action, the bank will notify all tenants that the property is facing foreclosure action. You should receive this notice before any post-foreclosure eviction action is even brought into court. The notice must include the bank's contact information, should you have any questions. For buildings with fewer than five rental units, the bank will deliver this notice directly to each tenant by certified, first-class mail. For larger buildings with five or more rental units, the bank will instead post copies of the notice on the outside of each of the building’s entrances and exits.
2. If the bank names you as a defendant in the foreclosure action, you will receive a formal summons and complaint from the county clerk. Keep in mind that this only serves to notify you a second time of the foreclosure action. So, even though you are named as a defendant, you have no legal obligation to appear in court to defend the action.
3. Make sure to continue to pay your rent during the foreclosure action. You are still subject to the same lease agreement requirements.
4. Even though foreclosure action is taking place, your landlord is still required to maintain the property. Report any lags in home maintenance to your local housing authority.
5. Once a foreclosure judgment has been served you will receive notification of this outcome. A foreclosure judgement usually revokes ownership of the property from the landlord. During this time, the bank has a duty to maintain the property until a new owner has been named.
6. If a new owner has purchased the foreclosured property and the sale and title transfer goes through, the new owner will provide you with his/her contact information and information about your rights. Your rights vary according to the type of rental building:
- Tenants in Rent-Controlled & Rent Stabilized Units: These tenants have the same rights and obligations as they did under agreements with their previous landlords. The only thing different is that the new owner can evict only one tenant/unit, if the owner will be using that unit as his/her primary residence. If this happens to you, the new owner(s) must provide you with a notice of eviction that gives you 90 days to find a new home.
- Tenants in Section 8 Housing: The rights of tenants in Section 8 housing are almost the same as above. The only thing different is that you can be evicted if you are found guilty of "serious or repeated violations of the terms and conditions of the lease, for violation of applicable Federal, State, or local law, or for other good cause." You can also be evicted if the new owner wants to use one of the units as his/her own, as mentioned above.
- Tenants in Non-Regulated Units: Tenants in non-regulated units have until either the end of their lease term or for 90 days after receipt of the notice from the new owner, whichever is greater. Tenants in these units that want to stay in their apartments should notify the new owners directly. However, the new owners are not obligated to extend the rental agreement once it expires.
- Tenants without a written lease: If you don't have written lease you can only stay in the unit for 90 days, while paying the same rent as you had under the old ownership.
1. If you are a tenant in a foreclosed property and feel you've been wrongly evicted, get help! Call the New York State Bar Association's Lawyer Referral Program at (800) 342-3661 to find one. If you do not think you can afford a lawyer, you may qualify for free legal assistance. Visit LawHelp New York at www.lawhelpny.org.