I called on a rental the other day for a prospective tenant. The listing indicated that the landlord was looking for a 3 to 6 month tenant. I spoke with the agent, who indicated that the landlord was looking for a short term tenant, as he is behind on his payments, and knows the property will be going into foreclosure.
We are hearing many stories such as this one, where owners are behind on their payments, but are offering their homes for rent. Or, we are seeing rental deals that are too good to be true. A 2500 square foot home, 1 year new, barely lived in for just $1000.
We have also heard in the past of many unknowing tenants that have been paying their rent, that are being put on the street once a home goes into foreclosure. The tenant is often left with nothing. No last month's rent that he paid, and often times they have also lost their security deposit. Many don't have any savings to be able to move somewhere else. They are forced out.
Well, what is a tenant to do?
This week a new law was enacted to protect the rights of tenants that are renting a property that goes into foreclosure. Previously, a foreclosure ended a lease, except in Washington DC and New Jersey. According to the Associated Press the law stipulates that the tenant is allowed to stay through the end of their lease if they have remained current on their lease payments. And, then they can stay for an additional 90 days. If a tenant is without a lease, then they are allowed to stay for 90 days, after the foreclosure. But the question has been asked, who determines when the 90 days begins?
But, often lenders are not aware there is a tenant in the property. And, new owners are ready to take possession of their newly purchased property, and may be asked to wait. How will this work?
Now, this is definitely an improvement to what tenants were offered before. Often times, nothing.
Is this a win-win situation for the lender and the tenant? The lender will have income coming in, no immediate vacancy and someone taking care of the property.
But, on the other hand, who will handle any major maintenance issues? What about when the property is offered for sale and there are a number of people in and out, such as realtors, appraisers, etc.? And, will the tenant be insured that they will receive their security deposit back if they return the property in the condition in which they found it?
I think that this is definitely a step in the right direction to protect these paying tenants, with non paying owners facing foreclosure.
This article is authored by

Sandy Shores Realtor, Melbourne FL Real Estate
Brevard County Real Estate & Investing
Palm Bay Florida Real Estate News
I buy, sell, rent, own and manage Brevard County real estate.