FAQs For Tenants About Foreclosure

Most often our tenants find out before we do that the property they are renting is one that the owner has not been paying the mortgage. This page is to answer some commonly asked questions about the foreclosure process and what it means to our tenants.

  • 1. Why didn’t someone tell me that the owner wasn’t making payments?
    You will most often find out when the homeowners mortgage company places a notice on your door or someone comes to the door. EXIT Realty N.F.I. will in turn find out when you call us to ask what to do. Very rarely does the owner call us to say they haven’t paid their mortgage, so we don’t know until you do.
  • 2. Can I trust what Northwest Florida Investments, Inc. tells me?
    As Realtors we think it is important to make everyone aware of whom we work for. We call it a Disclosure. In this case we work for the owner and we think you should know that. But we also have a duty and obligation to be fair and honest with everyone we do business with (you) and we take that obligation very seriously. So, what’s the point? This: Please read our FAQ’s here, but follow up with your own internet search or talk to other experts, like an attorney. Make sure they are qualified to answer. Most real estate agents do not manage rentals and are NOT good sources of information.

    Here is a good place to start:

    Northwest Florida Legal Services, Inc. – Pensacola, (850) 432-2336, or (850)432-3999. These lawyers offer free advice to tenants.

    or Legal Services of North Florida at (850)385-0029 – or click here to visit their website.

    If you want a paid lawyer but don’t have the money right now, The Dodd-Frank Wall Street Reform and Consumer Protections Act passed on July 21, 2010 directs the Secretary of HUD to develop a grant program for legal assistance to low and moderate income homeowners/tenants who are dealing with fore closure issues. We have no firther information concerning that assistance at this time.

  • 3. Will they make me move?
    The “Protecting Tenants at Foreclosure Act of 2009” (see below) ensures that under any condition you will have at least a 90-day written notice if you are required to move, so you can be sure that you will have plenty of time if it comes to that. But, you may not be required to move at all. Many mortgage companies do not want the property to sit vacant and deteriorate in this down market and they may make an offer for you to stay, possibly at a decreased rent.
  • 4. How long does a foreclosure take?
    From the time you get the notice until the time the foreclosure is complete can vary but is often several months and may be over a year. The process happens in several stages and each stage is timed to give the homeowner an opportunity to save their property.
  • 5. Why should I pay the rent if the owner isn’t paying his mortgage?
    The law is clear on this point: you must pay your rent. Like the old axiom that a defendant is innocent until proven guilty, the court gives an owner a chance to redeem him or herself until the foreclosure is final. Since the owner is assumed to be making every effort and since they may rely on the rent to make it work, you are still under legal obligation. Note: Some owners actually use this as a strategy to pressure the bank into modifying their loan and getting better terms. So, don’t assume the worst.
  • 6. Does this mean a parade of strangers coming to my door demanding entrance to my house?
    Your lease remains in effect and we (you and EXIT Realty N.F.I.) are still governed by the Florida statutes (Chapter 83 – The Landlord and Tenant Act) These statutes and our lease are very clear that you have the right to quiet enjoyment of the property you are renting and that you have the right to tell people they may not come on your property – with some small limitations.

    EXIT Realty N.F.I. and our representatives have a right of access in case of emergency to protect the property, and by appointment for scheduled inspections and maintenance.

    If someone comes to your door without an appointment or starts doing something on your property without your prior knowledge you have the right to ask them to leave and you should call us to discuss the intrusion.

  • 7. What about maintenance? Will our house be taken care of if something breaks?
    Again, the terms of your lease remain in effect. Just as you have the obligation to pay your rent and take care of the place, we have the obligation to provide you with prompt responses to your written maintenance requests.
  • 8. What is The Protecting Tenants at Foreclosure Act of 2009
    Below is a section of this federal law that applies to you. Click here to find the entire act in a pdf format for viewing or printing.

    The Protecting Tenants at Foreclosure Act of 2009

    In General – In the case of any foreclosure on a federally-related mortgage loan or on any dwelling or residential real property after the date of enactment of this title, any immediate successor in interest in such property pursuant to the foreclosure shall assume such interest subject to—
    The provision, by such successor in interest of a notice to vacate to any bona fide tenant at least 90 days before the effective date of such notice; and
    The rights of any bona fide tenant, as of the date of such notice of foreclosure—
    Under any bona fide lease entered into before the notice of foreclosure except that a successor in interest may terminate a lease effective on the date of sale of the unit to a purchaser who will occupy the unit as a primary residence, subject to the receipt by the tenant of the 90 day notice under paragraph (1); or
    Without a lease or with a lease terminable at will under State law, subject to the receipt by the tenant of the 90 day notice under subsection (1),
    Except that nothing under this section shall affect the requirements for termination of any Federal – or State – subsidized tenancy or of any State or local law that provides longer time periods or other additional protections for tenants.

  • 9. How long does my protection last under the PTFA Act?
    The Dodd-Frank Wall Street Reform and Consumer Protections Act (H.R. 4173) passed the House and Senate, and was signed by President Obama on July 21, 2010. Among other changes, in Section 1484 the bill extended the Protecting Tenants at Foreclosure Act (PTFA) sunset date by two years to December 31, 2014.
  • 10. If the new owner gives me a 90 day notice, when does the 90 days start?
    The Dodd-Frank Wall Street Reform and Consumer Protections Act bill also clarifies that the date of notice of foreclosure is the date complete title is transferred to the successor.
  • 11. Other References
    Northwest Florida Legal Services, Inc. – Pensacola, (850) 432-2336, or (850)432-3999. These lawyers offer free advice to tenants.

    or Legal Services of North Florida at (850)385-0029 – or click here to visit their website.

    University of Florida IFAS Florida Renters Guide to Foreclosure: (The University of Florida’s Institute of Food and Agricultural Sciences (UF/IFAS) is a federal-state-county partnership dedicated to developing knowledge in agriculture, human and natural resources, and the life sciences, and enhancing and sustaining the quality of human life by making that information accessible.)