Legal Lines

March 4, 2010

Source: McClelland & Anderson

With the help of McClelland & Anderson, we are taking the most commonly asked questions from our legal hotline and putting them in E-news. We will be featuring a different question each issue.

QUESTION: A tenant is renting a house that has gone to sheriff's sale. The redemption period will run out in one month but the tenants have three months remaining on their lease. Is their lease valid after the redemption period expires?

ANSWER: PROBABLY YES. A new federal statute provides that in certain circumstances, a lease will survive foreclosure. In the case of a "bona fide lease" and a "federally related" mortgage, the lender (or other purchaser at the foreclosure sale) must give the tenants at least 90 days to vacate the home. In addition, in these circumstances, the tenants have the right to stay beyond the 90-day period for the duration of their lease, unless the new owner intends to occupy the home.

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