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     If you peruse the blog you know that from time to time I jump on to Yahoo! Answers to pass around some knowledge.  I’ll say that most of what gets posted there is a load of junk.  It’s a shame because for some people who don’t know how to use the Internet or search engines real well it is their only place online to find answers.

     I once got into a heated discussion with someone on the site who gave bad information.  This woman was touting herself as a real estate expert and was giving landlord/tenant advice in absolutes with no knowledge of the area of the questioner.  Personally I think everyone who gets into landlording or real estate investment learns early on that all real estate is locally driven.  This is true in prices and this is true in landlord/tenant law.  The only absolutes you can quote about landlord tenant law are federally mandated items such as the equal housing laws, lead paint disclosures, etc.  Items such as what rights a tenant has if the landlord goes into foreclosure are all locally driven at the state and municipal level.  You cannot speak in absolutes on this unless you know the location.

     OK, off my rant about the ignorant posting as experts.  There have been a lot of questions lately about what rights a tenant has when a landlord goes into foreclosure.  A lot of the questions have to do with can the tenant stop paying rent.  My general answer is that the tenant can do whatever they want.  It’s a free country.  What can they do legally is a whole different ball game.  In most jurisdictions the legal answer is that you must continue to pay rent.  You have a legal binding contract.  You never know what the outcome of a foreclosure filing is going to be.  There are three possible situations in this:

1. Property has a short sale completed.   
   • In this scenario a lack pf payment by the tenant could cause an eviction.  If the new owner is an investor they may not want a tenant who stops paying, for any reason.
2. Landlord makes arrangement with the bank to keep the property.     
   • Again, an eviction is likely here.  The landlord isn’t going to want you in the property when you stopped paying rent.
3. Bank takes the property back.     
   • Your lease used to be voided but the Protecting Tenants at Foreclosure Act of 2009 changed all that.  Some states have stricter laws than what the federally mandated minimums require.  There is a PDF at the end of this post listing each states laws.  If the state has stricter laws than the Protecting Tenants at Foreclosure Act of 2009 then they stay in effect.   

     One sure fire thing is that if a tenant does get an eviction on their record other landlords will treat then as a pariah.  No one will want to rent to them anymore.  Play it safe and know your rights. 

     I found a listing of tenant rights by state.  Check it out, it has a lot of good information on your rights if you are a tenant facing foreclosure.   Tenant Rights in Foreclosure

     I’ll be posting on the Protecting Tenants at Foreclosure Act of 2009 and my views on it shortly.

Some laws can be good.  Some can be bad.  When you are someone who is on the up-an-up and tries to follow all the laws and do the right thing, over-regulation can be a burden. I see a huge amount of regulation coming into investment properties.  This regulation will be to protect tenants who are up to date on their rent payments but living in a home going to foreclosure.  

My post on Friday talked about Sheriff Tom Dart in Illinois that is refusing to evict tenants from properties where the landlord was foreclosed. What he wants is to push the banks to give notice to the person living in the property that foreclosure is coming.  I agree with this as it can protect the tenant but I can see bigger issues it may cause.  First, there is the potential of a sale.  If a good tenant is in a property, one that pays their rent on time and maintains it well, the house will sell faster to an investor with a good tenant than empty.  You know that once a tenant receives word that a foreclosure is in the works, they are gone.   Second, and I am cynical here, there are always people who try to ride the system for all they can.  This gives tenant's one more weapon in their arsenal to not pay rent.

Tom Dart's stand seems to be contagious as a Genesee County Missouri Sheriff, Robert Pickell, is following suit.  He's started a moratorium for renters who are facing foreclosure.  Here is a link to the article. Anyone see a trend starting?

 Here are some links to articles on tenants who are being forced out.

This tenant in Philadelphia was taken for a ride by an investor who assumed the owner's mortgage.

This Wesley Chapel tenant moved into a property that was heading into foreclosure.

This Laguna Hills guy paid $30,000 in rent and the place in in foreclosure.

This article gives some good pointers on how to protect yourself from landlord's who may be facing foreclosure.