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Houston Attorney Paul Sternberg looks at the implications surrounding foreclosure on residential real estate rentals
Houston Attorney Paul Sternberg | Foreclosure Notes
Houston Attorney Paul Sternberg is here to save the day! When a landlord or property investor opts to sell a piece of residential real estate, it’s usually the case that any current tenant or tenants will need to begin the search for a new place to call home. How quickly they must vacate the now-sold property, however, is often the cause of some confusion, according to Paul Sternberg of Houston.
“Recently I was approached by a couple whose rented home had been foreclosed on,” explains Sternberg, an experienced attorney and real estate investor from Houston, Texas. “The bank had given them until the end of the month to move out, despite the fact that they had nine months remaining on their lease.”
“‘What should we do?’ they asked,” Sternberg reveals.
Despite dealing predominantly with commercial property, this is becoming an increasingly common question for Sternberg and other attorneys of varying specialties, he says. One misconceived notion is that, upon foreclosure, any existing agreement with the previous landlord becomes invalid as he or she no longer owns or has any rights over the property which now belongs to someone else.
Thankfully, this is not the case, as Sternberg explains. “In this situation, any individual, couple, family or other group renting a property would be protected by the ‘Protecting Tenants at Foreclosure Act of 2009,'” he reveals.
“The Protecting Tenants at Foreclosure Act of 2009 states,” Sternberg continues, “that, in the case of any foreclosure on a federally related mortgage loan or on any dwelling or residential property, the bank assumed its interest subject to the rights of any bona fide tenant on the date of foreclosure.”
Tenants in this situation, he says, must be given at least ninety days’ notice to vacate. Furthermore, any tenant or tenants will also likely have the right to occupy the premises until the end of their lease term where more than ninety days remain, according to Sternberg.
“If someone is renting without a lease, or with a lease terminable at will under state law,” he adds, wrapping up, “they would still be entitled to ninety days notice to vacate which is important to remember under the circumstances.”
THIS ARTICLE SHOULD NOT BE RELIED UPON AS LEGAL ADVICE.
Attorney Paul Sternberg, of Houston, Texas, states and declares that the above text is not offered as legal advice, but is provided as general information. The information contained may not be suitable for all individuals or situations. No attorney-client relationship is created or implied by the provision of this information, nor does the aforementioned make any warranties, whether expressed or implied, of any kind. To discuss a particular situation in more detail, please contact attorney Paul Sternberg for a consultation by calling 713-392-4322.