Tenant Rights After Foreclosure
What are the rights of tenants after a foreclosure?
If you are a tenant and the building in which you are living is sold at foreclosure, you have certain rights under Massachusetts law. Whoever buys the building at the foreclosure sale becomes your new landlord and must follow the law.
Sometimes the new owner is the bank that held the mortgage or an investor who doesn’t want the responsibility of being a landlord. The new owner may want to get rid of the tenants as quickly as possible so the building can be resold easily. Regardless of the owner’s plans for the building, the owner cannot violate your rights as a tenant.
According to the law:
- You do not have to move out of the building right away, even if the owner tells you to leave. The law requires the owner to give tenants at least 30 days notice to leave.
- If you do not agree to leave after 30 days, the new owner must start eviction proceedings to get you to leave. You have the right to a court hearing. The court will consider your situation and decide when you must move. You can ask the court for six months (up to a year if you are disabled or age 60+) to find a place to live.
- If you have a state or federal housing subsidy, like Section 8, your lease or rental agreement remains valid after a foreclosure sale. The new owner cannot evict you before your lease is up unless you break the rules of your agreement.
- Leases other than subsidized housing leases end at foreclosure and you become a tenant-at-will. You are still a legal tenant and can stay in the building until a court orders you to move.
For more information, see Information for Tenants and Tenants’ Rights: What Tenants in Foreclosed Properties Need to Know from the Office of Consumer Affairs.
What are the responsibilities of the new owner?
The new owner has the same responsibilities as the previous owner. It does not matter if the new owner is a bank, an investor, or an individual buyer.
- The new owner must maintain the building. You should notify the owner in writing if repairs are needed. If the new owner does not make the repairs and your health or safety is at risk, you should call your city or town’s code inspection department.
- The new owner must provide the same utilities that your previous landlord was required to provide. If the new owner stops paying for utilities and you get a shutoff notice, contact the utility company right away. If you need help, you can call the Department of Public Utilities at 1-800-392-6066.
How do I pay the rent?
You must pay your rent to the new owner, not your old landlord. You must pay rent even if the new owner does not ask for rent.
If you cannot find out who owns the building, or if the new owner does not accept your rent payment, keep a record showing that you tried to pay the rent. Save the rent money in a bank account or other safe place. If the owner later tries to evict you for not paying the rent, you will have the money to show at your court hearing.
If you have a rent subsidy such as Section 8, be sure to tell the agency in charge of your subsidy that your building has a new owner.
What is “cash for keys?”
The new owner may offer you money to leave right away, sometimes called “cash for keys.” You can decide if you want to accept the offer or not. It is your choice.
Before taking “cash for keys,” make sure you have another place to live and that the money covers your moving costs and other housing-related expenses. Once you accept the offer, you give up your legal rights.
Remember that the cash offered is a first offer and is negotiable. In Massachusetts only a Judge can tell you that you have to leave your home.
Also if there are housing code violations existing in your home an owner cannot take eviction proceedings against you until the property has been certified as being up to code by the city or town you reside in.
If you are being bullied by a property manager or attorney working for the new owner and feel that there are housing code violations in your home call the code enforcement department of your local building inspector’s office immediately and ask to have an inspector come and look at your home.
Where can I get help?
If you have questions about your rights or if you need help dealing with the new owner of your building, you should call your local Legal Services office.
