PROTECTIONS FOR RESIDENTIAL TENANTS IN FORECLOSURES
If you are a tenant and your landlord has their property foreclosed upon, there are a number of protections for you during and following the foreclosure process.
NOTICE OF FORECLOSURE REQUIRED
First, the landlord/owner must notify the the tenants that a foreclosure action has been commenced against the property and if a judgment is entered, the date that the redemption period expires. Second, the plaintiff (typically the lender) in a foreclosure action must provide tenants with notice when the foreclosure action is filed, when the foreclosure judgment is entered, and when the confirmation of the foreclosure sale is scheduled. If a plaintiff in a foreclosure action fails to give the proper notices to the tenant, a tenant can seek damages up to $250, plus reasonable attorney fees. These notice provisions allow tenants to be aware of what is happening with repect to where they live so they are not blindsided when they are told they need to vacate their apartment.
TENANT STAY AND RENT WITHHOLDING
In addition to the notice provisions, tenants are also allowed to stay in their residence for up to two months following the month when the confirmation of foreclosure sale occurs. The tenants can also withhold the last period’s rent in consideration for their security deposit paid. Once the confirmation of foreclosure sale occurs and the tenant decides to stay for an additional two months, the tenant must make arrangements to pay rent to the new owner and not the former owner of the property.
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These are just a few examples of the protections afforded to tenants when their landlord’s property has been foreclosed upon. If you have further questions or desire additional information regarding a tenant’s rights, contact Attorney Greg Babcock at our Green Bay, Wisconsin office.