It can happen to anyone. You are going through the daily grind of life with family and work while living in your rental property. At the time, it made financial sense to live in a rental property in an effort to avoid homeownership risks. But what happens when you find that your landlord has not been making mortgage payments on the house and it's now being foreclosed? Do you have any rights and what can you do?
Research Local and State Laws
In 2009, the Protecting Tenants at Foreclosure Act gave tenants rights during the foreclosure crisis. Unfortunately, this act expired in 2014. However, you can find out what your options are under local and state laws. The National Housing Law Project is a good place to start investigating what rights you may have in the state you reside in. It may also be worthwhile contacting an attorney for legal advice.
Verify Exactly What Is Going On
A tenant deals with a lot of confusion during a foreclosure. Does the landlord still own the property or is it now bank-owned? Are utilities still being paid? Do you still pay rent? Will you have to move out? It's important to get everything in writing and be sure to visit the clerk at your nearest court to verify ownership; don't just take your current landlord's word for it. Keep paying rent even if it seems unfair to you. Unfortunately, the landlord can still evict you if you don't. Also, contact the utility companies to avoid shut-off and offer to pay them directly if needed.
Consider Small Claims Court
If you feel that your landlord is being uncooperative and making the situation even more difficult consider taking him or her to small claims court. According to Nolo, "the tenant can sue the original landlord for moving and apartment-searching costs, application fees, and the difference, if any, between the new rent for a comparable rental and the rent under the old lease." While your landlord may not have the money at that time, you still have a good chance of recouping some money in the future.
Finding yourself on the receiving end of a foreclosure that isn't your fault is frustrating. Be sure to arm yourself with knowledge of the latest landlord/tenant laws and requirements and document all communication.