How Foreclosure Affects Rental Properties

• Let's say that you're a renter. You've dutifully paid your rent on time every month, but your landlord hasn't been paying the mortgage and now the rental property is in foreclosure. The new owner can either honor your existing lease or require you to vacate the property. How much time do you have? Under new federal law, if the foreclosure occurred on or after May, 20, 2009, you may have as long as 90 days.
  
  

New Federal Protections for Renters

• The federal Protecting Tenants at Foreclosure Act of 2009 mandates that when a home has been bought through a foreclosure sale and the new owner chooses not to honor the existing lease, he is required to give 90 days' written notice to vacate after foreclosure. The clock starts ticking on the day you receive the letter, not on the day of foreclosure or the date on the letterhead. The only exception to this is if the new owner intends to make the property his primary residence. Any foreclosure that occurred before the signing of this federal law is subject to Texas law, which requires only 30 days' notice under the same circumstances.
  
  

Homeowners Get Less Time

• Let's say that you're not a renter. You live in the house and you're the one responsible for paying the mortgage. Getting to the point of foreclosure can take a while, as long as 60 to 90 days, during which time you will have ample opportunity to come to a resolution other than foreclosure. But if you don't, then you'll have a lot less time to vacate after foreclosure than a renter would. The Texas Property Code requires only three days' notice, after which further legal action can be taken against you.
  
  

Protections for Active Military

• Are you active military? Foreclosure proceedings can be stayed (postponed) during your active duty and up to nine months after your duty is complete thanks to new changes in the law.
  
  

What About Your Stuff?

• Texas does not allow landlords or new owners to deny access to residential property or your personal property inside without due process. This means that they can't change the locks, lock you out, or pack up your stuff and haul it away without permission from the court.