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Tenant Services

Foreclosure Protections for Renters Back to top 

Two different laws offer protection to renters living in properties facing foreclosure. One of them is a federal law and one is a state law. Both laws offer important protections for tenants.

This information is meant to be general information about foreclosure protections for renters and should not be considered legal advice. If your rental property is going into foreclosure, or if you have received a notice to vacate after a foreclosure, it is essential that you speak with an attorney about your specific situation. See our Legal Assistance Guide webpage for more information on how to access legal services in your area.

Tenants who find themselves in a property facing foreclosure should be aware of the following:

  • Tenants must continue to pay rent and comply with all terms of their rental agreement or lease, even if the rental property is going into foreclosure.
  • Tenants do not make rent payments to the original landlord after the property is lost in a foreclosure sale. They are no longer your landlord because they no longer own the property. Payment must go to the new owner. (See information below to help determine whether or not the landlord still owns the property.)
  • Tenants are not required to immediately vacate after the foreclosure sale.
  • Tenants must always receive proper written notice to vacate before a new owner or bank can begin an eviction action.
  • Unless the new owner wants to move into your unit, a valid unexpired term lease must be honored under federal law.
  • If someone contacts you claiming to be the new owner, ask to see the “Trustees Deed” for the property to confirm ownership. You can also attempt to confirm authenticity with your county’s auditor or records office.
  • If your landlord is responsible for utility bills and the utility company cuts your services, this can be an indicator that your landlord is in foreclosure. If the landlord lacks the money to pay for utilities, they may also lack funds to pay the mortgage. Research the publically recorded documents in the county where the property is located to see if a “Notice of Trustee Sale” has been filed to indicate an upcoming foreclosure.

Before the Foreclosure Back to top

If your landlord stops paying their mortgage, the bank will often begin the foreclosure process to take back the building. The bank will use a “Trustee” to facilitate the foreclosure process, who will issue notices to the landlord or tenants. The Trustee will establish a date for a foreclosure sale – sometimes called a foreclosure auction – where the landlord will lose ownership of the home if they can’t catch up on the mortgage. The Trustee merely facilitates the process; they do not make decisions about who ends up owning the property.

State law requires that the foreclosing party, such as the bank or trustee, must provide renters with at least 120 days’ written notice before the date of the foreclosure sale. This notice does not terminate your tenancy; it only informs you of a pending foreclosure sale. The document tenants receive is called the “Notice of Trustee Sale.” It will have the date of the foreclosure sale listed. This notice is filed with the County Auditor’s office. If you have seen or received notice of a pending foreclosure sale, it is very important that you pay attention to it, even if your landlord tells you not to worry about it or reassures you that they are “taking care of it.”

Sometimes landlords will remove the Notice of Trustee Sale so tenants are not aware of the foreclosure. It is a good idea to find out more information about the status of the property if you can. You can try researching or communicating with the Trustee that sent the notice. Often the Trustee won’t give you much information, but it is a good idea to contact them as you get closer to the foreclosure sale to make sure the date has not changed.

For example, your landlord may get caught up on the mortgage payment after you’ve received the notice, which could cancel the foreclosure sale, and they would continue to be your landlord. If a Notice of Trustee Sale has been filed, you can also try doing a public records search in your county to see if they have more information. King County Recorder’s Office has an online Records Search. For other counties, visit Washington Land Records and Deeds Directory.

Remember, you must continue to pay rent up to and, in most cases, past the date of foreclosure sale. Failure to do so could put you at risk of having an eviction lawsuit filed against you.

If you know that a foreclosure sale date is coming, it may be a good idea to think ahead about documenting your rights to both the old and new property owners. You can remind the landlords being foreclosed on of their obligation to send any deposit money and last month's rent you paid to be returned to you or transferred to the new owners. RCW 59.18.270 states that the old landlords must refund the deposit back to the tenants, or transfer the deposit to the new property owners. If the old owners fail to do either, they can be liable to the tenants for twice the amount of the deposit, along with court or arbitration costs and attorneys’ fees.

After the Foreclosure Back to top

1) If a New Property Owner Wants You to Continue as a Renter

2 If a New Property Owner Wants You to Vacate

3) “Cash-for-Keys Offers”

4) If There is No Contact from a New Property Owner


1) If a New Property Owner Wants You to Continue as a Renter

To After

After the foreclosure sale, the new owners of the property may not want you to vacate the unit; they may want to keep you on as a renter. If so, they should contact you to provide you with the new address where you will send your rent money.
There are a few specific guidelines written out in the Landlord-Tenant Act that regulate the changeover of one property owner to another in a rental unit. RCW 59.18.270 states that the old landlord must refund the deposit back to the tenant, or transfer the deposit to the new owner of the property. If the old owner fails to do so, they can be liable to the tenant for twice the amount of the deposit, court or arbitration costs, and attorneys’ fees.

If you are on a lease for a set period of time, under the federal law, the lease should be continued as-is with the new landlords, unless they wish to occupy the home as their primary residence. No terms of the lease can be changed except by mutual agreement. The state law allows landlords to ask tenants to sign new rental agreements if they are going to stay on in units.

If the new landlords do contact you and ask for rent money, it’s a good idea to ask for some form of written documentation from the new landlords to ensure that they are the actual property owners. Beware of scammers that pose as landlords. You can ask the new landlord to provide a copy of the Trustee’s Deed as proof of ownership. Contact the County Auditor to ensure that the Trustee’s Deed is legitimate. You can look up the contact information for County Auditors at Washington Land Records and Deed Directory. A local title insurance company may also be able to help you obtain this information.

2) If a New Property Owner Wants You to Vacate

To After

Both federal and state foreclosure protections for renters may come into play after a foreclosure sale. Consult with an attorney to get information and advice on your specific situation. See our Legal Assistance Guide http://www.solid-ground.org/Tenant/Pages/LegalAssistanceGuide.aspx webpage for more information.

     2a) Federal Law

The federal Protecting Tenants at Foreclosure Act passed in May 2009. It offers bona fide tenants in foreclosed properties extra protections.

You are a bona fide tenant if:

  • You are not the child, spouse or parent of the former owner.
  • The lease or tenancy was the result of an "arm's length transaction" (not a special deal between friends or family).
  • The rental amount is fair market, not discounted, unless the rent is reduced by a government rent subsidizing program.

The new property owner must give bona fide tenants 90 days’ written notice to vacate after a foreclosure sale. If you had a lease with your previous landlord, the new owner must honor it unless they want to move into the unit themselves. If they do plan to occupy the unit, renters are still entitled to 90 days’ notice to vacate. Be aware that this law expires December 31, 2014, but may be renewed before expiration.

If you are not a bona fide tenant but you are a renter, you will probably still be entitled to the protections offered by the state law.

     2b) State Law

Washington State law entitles renters to 60 days’ notice to vacate foreclosed properties before new owners can begin eviction actions. The 60-day period starts after notices are served on tenants who must vacate in 60 days or more before the end of the monthly rental period.

Unlike federal law, state law does not require new property owners or banks to honor  leases with previous landlords.

Tenants utilizing state law may be able to avoid paying rent during the 60-day notice period. State law says that the new property owner or bank cannot evict tenants for rent nonpayment during the 60-day notice period. The only reason new owners can evict tenants during those 60 days is for “waste or nuisance.” Waste and nuisance are terms that indicate a gross offense on the part of the tenant, which might include major destruction of the rental unit or an arrest on the property. It may also include criminal offenses, including drug- or gang-related crimes.

However, there are significant risks and potential complications associated with not paying rent during the 60-day period. Any time tenants do not pay rent, they put themselves at risk of having an eviction lawsuit filed against them. Though state law is clear, this law has not yet been tested in court, so it is unclear how this will play out for tenants. Seek legal advice and assistance before making any decisions on how to utilize legal protections for tenants in foreclosed properties. See our Legal Assistance Guide webpage for more information on how to access legal services in your area.

3) “Cash-for-Keys" Offers

To After

It’s possible that new owners, trustees or banks will offer you money to move out of a unit at the time of the sale. This is sometimes called a “cash-for-keys offer.” Tenants can agree to vacate units before their legally entitled 60- or 90-day notice period if they want to, but they certainly don't have to. A cash-for-keys offer will almost always require the home to be in broom-clean condition before payment will be made. If you do agree to accept a cash payment in exchange for moving out of a unit early, be sure to get the terms in writing, signed and dated by both parties.

4) If There is No Contact from a New Property Owner

To After

It’s possible that a new property owner may not communicate with you at all about your tenancy after the foreclosure sale. If they don’t communicate with you, it may be difficult to figure out who the new property owner is. Landlords don’t always communicate changes, although RCW 59.18.060(14) requires that tenants be  notified immediately of any landlord changes, in writing, and delivered either by personal service or first class mail. If you receive no contact from a new property owner and cannot locate them, it is important to save your rent money, because the new owner has the right to collect it from you even if they do not immediately contact you to tell you where to send the rent.

     4a) Section 8 Voucher Tenants

Federal law also offers protection for Section 8 (Housing Choice) Voucher holders living in properties facing foreclosure. New owners are required to honor Housing Assistance Payment (HAP) contracts with the housing authority to maintain vouchers. For more information, see Washington LawHelp’s I am a Tenant Living in a Foreclosed Property: What are my Rights? and the Sample Letter: For Section 8 Tenant to Send to New Owners of Foreclosed Property.

     4b) Seattle Tenants

Tenants living in Seattle may still be protected under the Just Cause Eviction Ordinance (JCEO). If you pay rent to the new property owners and they accept it, it could be considered that you established a month-to-month tenancy and are protected under the JCEO.

The purchase of property at foreclosure sales is not explicitly listed as one of the Just Cause reasons in the ordinance. However, it is unclear how these laws will be interpreted in court. The state and federal laws still apply in Seattle, but new property owners may also have to comply with JCEO. See our Legal Assistance Guide webpage and seek immediate legal advice if you are a Seattle tenant living in a property facing foreclosure.

Resources: Foreclosure Back to top

FAQs: Foreclosure Back to top


Q: When my landlord’s property is in foreclosure, how many 
     days’ notice am I supposed to be given?

To FAQs 

State law requires that the foreclosing party, such as the bank or trustee, provide renters with at least 90 days’ written notice, and probably 120 days’ written notice, before the date of the foreclosure sale. 

Q: After the foreclosure sale, how many days’ notice to terminate
     my tenancy am I entitled to?

To FAQs

Bona fide month-to-month tenants are entitled to 90 days’ written notice to vacate after the foreclosure sale under federal law and 60 days’ written notice under state law. Under federal law, tenants on fixed-term leases should have their leases passed to new landlords as is, unless a new landlord wishes to occupy the home as their primary residence, in which case tenants are entitled to 90 days’ written notice. 

Q: Do I still have to pay rent if I find out my rental property is 
     going into foreclosure? 

To FAQs

Yes. Tenants must continue to pay rent and comply with all terms of the rental agreement or lease, even if the rental property is going into foreclosure. If your landlord is in default and undergoing foreclosure, it may seem unfair to have to continue paying rent to them. However tenants must continue to pay rent as long as their landlords are the legal owners of the property. If the property was lost to foreclosure, payments are owed to the new owners of the property, not the old landlords. Tenants who do not pay rent put themselves at risk of having eviction lawsuits filed against them.

Q: How can I find out if the property I live in is in foreclosure?

To FAQs

You can try researching or communicating with the trustee that sent the notice. If a Notice of Sale has been filed, you can also try doing a public records search in your county to see if they have more information. King County Recorder’s Office has an online Records Search. 

Q: Do I have to vacate the property if my unit has been 
     foreclosed on?

To FAQs

Not necessarily. After the foreclosure sale, the new property owner may not want you to vacate the unit. They may want to keep you as a renter. If so, they should contact you to provide you with the new address where you will send your rent money. If you are on a lease for a set period of time, under the federal law, the lease should also be continued as is to the new landlord, unless they wish to occupy the home as their primary residence (in this case, 90 days’ notice is required). No terms of the lease can be changed except by mutual agreement. State law allows landlords to ask tenants to sign a new rental agreement if they are going to stay on in the unit. If a new property owner wants you to vacate, they are required to give you at least 60 days’ written notice to vacate.

Q: There was a foreclosure notice posted on my door, but the
     landlord says there's nothing to worry about. What should
     I do? 

To FAQs

If you have seen or received notice of a pending foreclosure sale, it is very important that you pay attention to it, even if your landlord tells you not to worry about it or reassures you that they’re “taking care of it.” It is a good idea to find out more information about the status of the property if you can. You can try researching or communicating with the trustee that sent the notice. If a Notice of Trustee Sale has been filed, you can also try doing a public records search in your county to see if they have more information. King County Recorder’s Office has an online Records Search. Tenants in foreclosed properties are still entitled to 60 or 90 days’ notice before they are required to vacate units.  

Q: Does it matter if I am on a lease when the property forecloses?
     Will my lease be honored by the new property owner? 

To FAQs

If you are on a lease for a set period of time, under federal law, the lease should be passed as is to the new landlord, unless they wish to occupy the home as their primary residence, in which case 90 days’ notice is required. No terms of the lease can be changed except by mutual agreement. The state law allows landlords to ask tenants to sign new rental agreements if they are going to stay in the units. Landlords utilizing state law do not have to honor tenants’ leases, and may give tenants 60 days’ notice to vacate their units. 

Q: What happens to my last month's rent and deposit? Do I lose
     them if the house forecloses? 

To FAQs

RCW 59.18.270 states that the old landlord must refund the deposit back to the tenant, or transfer the deposit to the new property owner. If the old owner fails to do this, they can be liable to the tenant for twice the amount of the deposit, along with court or arbitration costs and attorneys’ fees. 

Q: Who do I pay rent to after the foreclosure date? What if 
     no one contacts me after the foreclosure sale?

To FAQs

The new property owners should contact you to tell you where to pay your rent. It’s possible that new property owners may not communicate with you at all about your tenancy after the foreclosure sale. If they don’t communicate with you, it can be difficult to figure out who the new property owners are. Landlords don’t always communicate the changes even though RCW 59.18.060(14) requires that tenants should be notified in writing immediately of any landlord changes. Notice must be delivered either by personal service or first class mail. If you receive no contact from new property owners and cannot locate them, it is essential that you save your rent money. The new owners have the right to collect that money from you even if they do not immediately contact you to tell you where to send the rent.  

Q: How do I know that the person asking for my rent is the 
     real owner of the house? 

To FAQs

If a new landlord does contact you and asks for rent money, it’s a good idea to ask for some form of documentation to ensure they are the actual property owners. You can ask them to provide a copy of the Trustee’s Deed as proof of ownership. You can then contact the County Auditor to ensure that the Trustee’s Deed is legitimate. You can look up the contact information for the County Auditors at Washington Land Records and Deed Directory. A local title insurance company may also be useful in helping you obtain this information. 

Q:  I am a Section 8 voucher tenant. What additional protections 
     do I have? 

To FAQs

Federal law offers protection for Section 8 (Housing Choice) Voucher holders who are living in properties facing foreclosure. New owners are required to honor Housing Assistance Payment (HAP) contracts with the housing authority to maintain vouchers. For more information, see Washington LawHelp’s I am a Tenant Living in a Foreclosed Property: What are my Rights?, and Sample Letter: For Section 8 Tenants to Send to New Owners of Foreclosed Property. 

Q: Does the Just Cause Eviction Ordinance (JCEO) apply to me 
     if I live in Seattle? Will JCEO keep me from being evicted
     after a foreclosure? 

To FAQs

Tenants living in Seattle may still be protected under the Just Cause Eviction Ordinance (JCEO). If you pay rent to a new property owner and they accept it, it could be considered that you established a month-to-month tenancy and are protected under JCEO. The purchase of property at foreclosure sale is not explicitly listed as one of the Just Cause reasons in the ordinance. State and federal laws still apply in Seattle, but new property owners may also have to comply with JCEO as well. Seek immediate legal advice at our Legal Assistance Guide webpage if you are a Seattle tenant living in a property facing foreclosure. 

Q: My landlords sold the house to someone else before the
     foreclosure sale. I live outside Seattle and have a month-
     to-month rental agreement, and the new owners gave me
     a 20-day notice. Am I still entitled to 90- or 60-days’ notice
    
to vacate? 

To FAQs

No. It is not uncommon for landlords to do “short sales” of their homes to purchasers prior to losing properties outright at foreclosure sales. This is essentially no different than if a landlord was selling the property in a regular real estate transaction whereby your tenancy and rental agreement is transferred to the new purchaser. Federal and state laws requiring  60- or 90-days’ notice only apply if properties are lost through foreclosure sales (also known as “auctions.”). If a foreclosure sale does not take place and the property is sold to someone else, you are entitled to 20-days’ written notice to terminate your tenancy prior to the end of your rental period under RCW 59.18.200. If you live in Seattle, the Just Cause Eviction Ordinance (JCEO) would protect you from a “no cause” termination.  

Q: The foreclosure date of the “Notice of Trustee Sale” has
     passed, but my old landlords are still telling me to pay them
     rent. They are threatening to evict me if I don’t pay. What
     should I do? 

To FAQs

Tenants do not owe rent to landlords who lose their properties at foreclosure sales, because they are no longer the actual property owners. Landlords cannot legally evict tenants from properties they don’t own. Tenants may owe rent to new property owners. You can ask for a copy of the Trustees Deed to verify who the new property owners are. If you have been paying rent to  landlords past the date of the foreclosure sale, they owe you the rent money back. You may have to take them to Small Claims Court if they do not return the money. 

Q: I have been paying my rent to my old landlords, but it turns
     out they lost the property in foreclosure some time ago. Now
     the new owners are asking me for back rent. I paid the old
     landlords that money already; do I have to pay again to the
     new landlords? 

To FAQs

Probably. The old landlords illegally collected that rent money from you, but it may be difficult to have it refunded in time if you have to go to Small Claims Court to get it back. In the meantime, the new landlords could begin an eviction action against you for rent nonpayment. Be sure to always keep good documentation of your rental payments by saving receipts. You can call the new property owners to explain the situation and provide copies of the rent receipts, and ask them to collect from the old landlords. They are not required to do this, but tenants can still request it. 

Q: The foreclosure sale has passed and the new owners gave me 
     a 60-day notice to vacate, but I need more time to move. Aren’t
     I entitled to 90-days’ notice to vacate under the federal law?

To FAQs

Maybe. If you are a bona fide tenant, you are entitled to receive 90-days’ notice under the federal law. If you are not a bona fide tenant, state law grants 60-days’ notice to vacate the property. Use the sample letters and copies of the law on this website to inform the new owners of your right to receive 90-days’ notice. If the owners do not recognize your rights, find legal assistance using our Legal Assistance Guide webpage. 

Q: I don’t need time to move. I want to move out as soon as 
     possible but have an unexpired term lease. Can I just leave? 

To FAQs

It is unlikely. If the property hasn’t been sold at a foreclosure sale, your lease is still in full effect. It is also unlikely the landlords will let you out of the lease early. If the landlords are trying to sell the property before the sale, the potential purchasers may not want renters in the building. In this scenario, the landlords may be more willing to negotiate letting you out of the lease before the end of the term. Be sure to have a written mutual termination agreement with the landlords to document that there are no penalties or further obligations. If the property is sold at foreclosure, it is more likely the bank or new owner will want you to vacate sooner. Contact the current owners and negotiate a mutual termination or a cash-for-keys agreement. 

Q: My landlords stopped paying the mortgage and utilities, and 
     our services have been shut off. What can we do? 

To FAQs

Contact your utility company and attempt to have a new account put in your name. This may be difficult as some jurisdictions do not let tenants do this; they only create accounts for property owners. Try to explain the circumstances to the utility company and ask for a policy waiver in that situation. If you do get the utilities put in our name, make sure to get a closing reading when you leave and shut off the utilities if possible.

Q: If state law says that I can’t be evicted for nonpayment 
     during the 60-day notice period after the foreclosure, do I
     still owe the rent? 

To FAQs

State law does not specify that you don’t owe the money; it only addresses appropriate causes to begin an eviction action.

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