Many lenders try to evict all tenants from a property immediately after a foreclosure sale, even if the tenants have paid their rent on time and have not violated any terms of their lease. Both federal and state law provide tenants with specific rights concerning evictions after foreclosure. The federal Protecting Tenants at Foreclosure Act of 2009 (Public Law 111-22) was signed into law in May, 2009. Under the law, a tenant with a valid lease can continue to live in the property for the term of the lease. Foreclosure does not change the status of the lease. A tenant at will, or a tenant whose lease has expired, can be made to vacate the property following foreclosure, as long as the lender, or purchaser at auction, gives the tenant a 90 day written notice to vacate the property. This applies to all tenants, with or without housing subsidies or vouchers. The law provides exceptions for those who purchase the property at a foreclosure auction and intend to occupy the property as a primary residence. Those purchasers are allowed to terminate a tenant's lease, but still must provide a 90 day written notice to the tenant to vacate the property. The law does not apply if the mortgagor or child, spouse or parent of the mortgagor, is the tenant. For tenants receiving housing subsides, such as Section 8, the lender or purchaser at auction must assume the responsibilities of the housing assistance payments contract with the local housing agency. Under state law ( G.L. c. 186, Sec. 13A) tenants who live in a property that is foreclosed on are entitled to at least 30 days written notice if a lender wants them to vacate their apartment. Also, if a tenant receives state or federal rental subsidy, the terms of their rental agreement will not be affected by a foreclosure sale.
Tenants who do not want to leave their apartments, after a lender gives proper notice, do not have to leave immediately. They have a right to a hearing in court. At the hearing, the court will determine how much time they will be allowed to vacate their apartment. Lenders may not force tenants to vacate an apartment against their wishes without court approval.
If you are concerned about your current situation, there are legal resources available to you:
Maintenance and Utilities
Even if a bank takes over the building, they are still legally responsible for maintaining it. If you're having problems with repairs or services that the owner is supposed to provide (like utilities), you should contact the bank or its broker or attorney, preferably in writing, and let them know what is needed. If utilities that the owner was supposed to provide (like water, or common area lights, or heat or hot water) have been shut off or are threatened with shut off, let the bank or the broker know, and also call the Inspectional Services Department in your city or town. You may be able to keep service on by paying a projected bill, and can deduct these payments from any rent due. You may also be able to get an order from the Housing Court ordering the bank to pay the utilities.
Rent and Subsidies
Being in a foreclosed building does not, by itself, entitle you to withhold rent. If a bank takes over and doesn't want to accept your rent, keep a record of your offer to pay. If you have a rental subsidy, let the subsidy agency know about the change in ownership, so that they stop paying the old owner. You should have additional eviction rights because of your subsidy.