I have seen this question a lot and it is really a distressing situation for both landlords and tenants. Landlords maybe trying to negotiate a modification with the bank and not realize they are in danger of a trustee sale or foreclosure sale at auction. The tenants might know ahead of time, think they might be able to bid on house and not be able to come up with enough funding. Whatever the situation renters DO HAVE RIGHTS.
As a renter you should always keep a record of your payments, receipts and your lease or rental contract in a file that you can locate easily. It doesn't hurt to scan and keep the files on a CD or in a computer file as well.
AFTER AUCTION:
Federal law allows your longterm lease to be in effect until ending date of the lease. Generally Federal law gives you 90 days even if you do not have a lease. This right is granted in the "Protecting Tenants at Foreclosure Act of 2009". EXCEPTIONS: if the new owner is a buyer that plans on LIVING in the home they must give you 90 day notice. Consult the Arizona Tenants Association if you need more details. This blog is not meant as legal advice.
A new owner may try to evict you and serve a Forcible Detainer Notice. This Notice will give you 3-5 days to answer. You need to answer it to protect yourself, laws are not automatic. Your LEASE should be in effect until the termination date with some exceptions as noted above. Again consult the Arizona Tenants Association if you need more details. This blog is not meant as legal advice.
As a renter once you have been informed of a new ownership you pay the new owner; even if the former owner is fighting the sale and trying to regain ownership. I know this is confusing to some landlords that have lost their house to a trustee sale, especially if they were negotiating for a modification. They should not put renter in the middle and should include the issue in their lawsuit, if they are pursuing legal action to reverse the trustee sale.
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