When a bank forecloses on a property, a tenant who's renting that property may be asked to vacate the premises through an eviction. While the bank could hire a management company to run the property and collect rent, it's more likely that it wants to sell the property as quickly as possible.

Unfortunately, when the property is foreclosed the lease is terminated. The tenant might not even know that the property is in foreclosure until he or she receives a notice of a new owner or an eviction notice. Some banks even offer a “cash for keys” program, which is designed to get tenants out as fast as possible.

The Mortgage Reform and Anti-Predatory Lending Act requires a 90-day notice to evacuate the property. If the tenant refuses to leave, eviction proceedings will proceed, and an eviction on his or her record will hurt their chances of finding housing in the future.  There is an exception to this rule for Section 8 (rent control) tenants.

Tenants who must leave because the property was foreclosed have rights under the Protecting Tenants at Foreclosure Act of 2009, and they can try to sue their former landlord in small claims court for:

  • Moving expenses
  • Apartment searching costs
  • The difference between the new and old rent
  • Application fees
  • Other reasonable costs associated with relocating


If you're in over your head with mortgage debt, bankruptcy might be the best way to stop foreclosure. Castle Law Office has been handling bankruptcies for Kansas City clients from more than 14 years. If you need the fresh start bankruptcy can provide, call us today at 816-842-6200 to speak with an attorney. Or click here to email us and schedule your free consultation.