What are renters rights?

Question

My neighboor is renting a property that is a foreclosure. The owner never said anything to them. A Real Estate agent came by and told them that they need to be out by the 22nd, and that the bank that now owns the home is willing to give them 2k if they go quietly without destroying the place. That is definitely not enough notice, and what are their rights? Can they haggle for more money? Maybe the bank thinks by offering them 2k, they will not have to proceed with an eviction?

Answer 1

That depends upon local laws and whether or not there is a lease involved. If there's a lease that predates the foreclosure action it very well may remain in full force and effect through it's expiration date. (That's not the case with a tax sale but often is with a mortgage foreclosure.)

If there is no lease or if local or state law kills the lease then the normal state required notice to quit -- usually 30 days but that varies from 15 to as much as 60 in some parts of the country -- is all that is required. It's not unusual for a lender to offer a cash buy-out to a tenant as an inducement to get them to move and to preserve the property.

Some will present it as an ultimatum through a real estate agent making it appear that you have no choice. I'd be suspicious of that. Real estate agents are somewhat notorious for not knowing a lot about real estate law other than the basics of purchases and sales. An attorney would know the law and would not lie about it though would not be required to explain the law to the tenant.

Your friend needs to do two things. First is to consult with a local real estate attorney and see where they sit legally. Once they know what their options are, they need to negotiate the move with the lender. The lender wants them out as soon as practical so that they can sell the place and wants to spend as little as possible, but their initial $2,000 offer is not cast in stone! The tenant can negotiate this and should. Personally, I'd counter at $4,000 to even $6,000 if it's a particularly nice place or if moving costs are high or it will be difficult to locate a similar property in the local area for a similar rent. They'll probably counter somewhere in between and they can take it from there. If they don't like the dollar offer, counter with more time to move.

There is another option that they may wish to look into. If they like the place and want to stay put they can always offer to purchase the place. Many lenders will make that an option in their first contact with the tenant. It can be a great deal for all parties -- the lender clears the place from their foreclosure list at minimal cost and will often offer better than market financing as an inducement, and the tenant becomes a homeowner at very little out-of-pocket cost.

Answer 2

The home has been forclosed and is owned by the bank.

They have the right to be evicted from the property through the courts. An eviction will give them more time, but will haunt their rental history and make finding a rental in the future much harder.

They have been offered $2k to move without destroying the place. I can guarantee that they will not receive one cent until they have fully vacated. So, yes, the bank will not have to evict.


They can try to haggle for more money, but the real estate agent and bank probably offered as much as they would have to lay out for legal fees and an eviction. Ask for much more and it would be cheaper for them to evict.

Answer 3

If you were leaving the apartment you would need to give them 2 weeks notice and I believe it's generally accepted that 2 weeks is all they are required to give as well. I doubt they'd give more money and what good would more money do anyway? It wouldn't get them a new place any faster. Anyone who is renting in a foreclosure should be ready to move at a moments notice because anything could happen.