Foreclosure occurs when borrowers do not pay the mortgage on a home they own, and their loan provider (typically, a bank) requires a sale of the residential or commercial property to cover the debt owed. A rental residential or commercial property foreclosure is a legal action versus the owner of the residential or commercial property. The bank that is owed the mortgage, or a specific or business can buy the residential or commercial property in foreclosure.

Tenants may not know that a foreclosure has actually been submitted on the residential or commercial property they are leasing. Even if they discover that an ownership change is occurring due to the fact that of a foreclosure, tenants might get lost in the legal shuffle and not understand how to pay lease or who to contact when there's a repair work concern, which can put their housing at danger. The federal Protecting Tenants at Foreclosure Act (PFTA) was enacted to help safeguard occupants in this situation.
housingworks.org
When Does the PFTA Apply?

The PFTA applies to many occupants when their property owners deal with foreclosure. The PFTA applies to all houses, consisting of single systems and multi-unit residential or commercial properties, and subsidized residential or commercial properties. And the law applies to renters with any kind of occupancy.

The PTFA does NOT use to a tenant if:

- the occupant is the individual whose name is on the mortgage (this is uncommon, a lease is different than the mortgage).

• the renter is the spouse, parent, or kid of the person whose name is on the mortgage.
• the rental agreement is not the outcome of an arm's length transaction (example: the renter and property manager had a personal, financial, or business relationship prior to participating in the lease).
• the lease is well listed below market rate, unless the lease is lowered due to the fact that it is subsidized
  
  How Do You Find out if a Foreclosure is Happening?
  
  Below are 3 options for discovering more info about whether a foreclosure has been filed on the residential or commercial property you are residing in.
  
  1. Call your county Register of Deeds.
• Use the Wisconsin Court's public online records (CCAP). Find out the legal name of the individual or entity that owns the residential or commercial property. Your lease may have the right name of the person who owns it, however another method to discover the legal name of the titleholder is to browse on your city assessor's office/online lookup. Use that details to browse on CCAP. Click "I concur" and then plug in either the personal name of the owner (under "celebration name") or the company name of the company that owns the residential or commercial property (under "service name"). The city assessor's website has different methods to recognize the residential or commercial property (parcel number, legal description, street address), so use the assessor's info to comb through all that while considering what might be on CCAP.
• Go to the Register of Deeds workplace at the City-County Building in Room 110, 210 Martin Luther King Jr. Blvd. Madison, WI. Staff ought to have the ability to help you determine if the residential or commercial property is in foreclosure.
• The constable keeps records for upcoming sales on this page.
  
  What Are My Rights as a Renter After a Foreclosure?
  
  The PFTA requires the brand-new owner (the owner who purchases the residential or commercial property in the foreclosure) to provide the tenant with a minimum of 90 days' notice before requiring the occupant to vacate, or, if the lease term extends beyond 90 days, enable the renter to remain in the system for the lease term.
  
  If the new owner will be living in the residential or commercial property, the new owner can terminate the lease with 90 days' notification even if the lease term extends beyond 90 days.
  
  Tenants with an Area 8 Housing Choice Voucher have additional rights under the PFTA. They may be able to stay in the unit under the existing lease and the new owner is required to continue the housing help payment contract. Transfer of ownership after a foreclosure is bad cause for ending a Section 8 lease.
  
  Foreclosure is not a valid factor for kicking out an occupant. But a renter can be kicked out if they do not pay rent or abide by the other requirements under the lease.
  
  The proprietor continues to be responsible for repairs up until the residential or commercial property is offered in the foreclosure. Once offered, the brand-new owner needs to is accountable for repair work and collecting rent. Within 10 days of becoming the brand-new owner, the brand-new owner needs to provide to the occupant, in composing, the name and address of the person accountable for gathering rent and making repairs.
  
  Do I Still Need to Pay Rent?
  
  Yes. If renters stop paying their rent on time while their property manager is dealing with foreclosure or after the foreclosure, the original or new owner may submit an expulsion.
  
  Do I Pay Rent to My Landlord or the Bank?
  
  Tenants are obligated to pay rent to the legal owner of their residential or commercial property unless a court has actually said that the tenant needs to pay lease to another person (for example, a "receiver"). Tenants are accountable for knowing who this is and paying rent to the best individual. The easiest method for a tenant to identify a residential or commercial property's present owner is to contact their city assessor.
  
  If there's a disagreement in between the bank and property manager or you are uncertain who to pay, you can write a letter to everybody included, consisting of the judge in charge of the foreclosure case, telling them how you are paying rent (or detail your attempts to pay lease) and to who, and why. You need to include copies of any crucial files and keep a copy.
  
  If you are unable to call the owner who you think you need to be paying lease to, make sure to consist of that info in the letter and keep the lease owed in an account so that it can be paid in full when the owner or the court gives you the information on how to pay rent.
  
  After Foreclosure, How Will I Know Who My New Landlord Is?
  
  In Wisconsin, when a rental residential or commercial property modifications owners, the new owner has 10 days to inform occupants in writing of the names and addresses of the people who will gather rent and are accountable for repair work and upkeep of the residential or commercial property. Wis. Stat. 704.09( 3 ), ATCP 134.04( 1 )( b).
  
  If your property owner is foreclosed on, you will get this letter after the "date of verification sale." This is the term for the date when the sale of a residential or commercial property in foreclosure is made final in court.
  
  Can I Use My Security Deposit for Last Month's Rent?
  
  No, not unless you and your property owner get in into a written contract that permits you to utilize your security deposit for the last month's rent. If you don't have a written contract and withhold your last month's lease, the property manager may submit an expulsion action against you.
  
  When you move out, the person who lawfully owns the residential or commercial property must follow all the laws about security deposits even if they didn't gather this cash from the old owner.
  
  Can I Be Evicted During a Foreclosure?
  
  While your property owner's foreclosure isn't a legitimate factor to evict you, you can still be evicted for non-payment of rent or violating your lease.
  
  Can I Move Before the Lease Ends or Stay in the Unit After the Foreclosure?
  
  If you wish to move before the 90-day period ends or before your lease ends, you can call your proprietor and ask if they will participate in a written arrangement to equally terminate the lease early. Similarly, if you wish to remain in the unit after the 90-day period or your lease ends, you can get in touch with the brand-new owner to inquire about a renewal of your lease.
  
  Can the Sheriff Force Me to Leave When I Haven't Received Any Notices?
  
  After a residential or commercial property in foreclosure is offered, the court may not understand that tenants are residing in the foreclosed residential or commercial property, and the property owner does not provide the tenant any notification when they need them to leave the residential or commercial property.
  
  After foreclosure, the court may presume the previous owner inhabits the residential or commercial property. The brand-new owner can request a "writ of help" to get rid of the previous owner. This is various from a "writ of restitution," which removes occupants after a judgement of expulsion. When the constable gets here to eliminate the previous owner, they might discover the renter rather. Tenants have different rights than the previous owner who had a foreclosure action filed versus them. Only a writ of restitution approved by a judge or court commissioner after a judgment for eviction licenses a sheriff to remove an occupant.
  
  You can discuss the situation to the court, constable, and new owner, and show them any essential files such as your lease and proof of rent payments. You may also wish to get in touch with an attorney.
  
  Here is a step-by-step introduction of the foreclosure process:
  
  1. The property manager defaults on payment of a mortgage loan.
• A foreclosure action is submitted in court by the bank.
• The property owner has a specified number of days to states a defense versus the foreclosure filing.
• Once that period is over, the court decides whether to accept or decline the defenses to the foreclosure. If the court rejects these defenses, they enter a judgment of foreclosure. NOTE: This is not the exact same thing as designating a brand-new owner.
• After the judgment of foreclosure, the landlord begins a "redemption duration" where they can repay the to the bank. During this time, the proprietor might treat the default or offer the residential or commercial property, ending the foreclosure and enabling the property owner to continue as owner. A redemption period can be a number of months, depending on the type of foreclosure submitted. NOTE: During the redemption duration, the landlord still gathers lease and is accountable for repairs.
• Once the redemption duration ends, if the property owner hasn't repaid the cash, there is a sheriff's sale where the residential or commercial property is sold to a brand-new owner or (typically) to the bank that demanded foreclosure.
• Once a residential or commercial property is offered, a hearing is set up to verify the sale.
• The confirmation of sale hearing occurs and, if the sale is confirmed, results in the "date of verification sale." The title of the home is transferred at the hearing. The brand-new owner might be happy to accept a new lease, however that is not needed.
• The court might grant the new owner a "writ of help" in the verification of sale hearing in action # 8, which will permit the new owner to go to the sheriff and have the previous owner gotten rid of if they live in the residential or commercial property.
  wikipedia.org
  More detailed details about foreclosure and the PFTA is offered in this Wisconsin Bar article.
  
  -- * The Tenant Resource Center is not a law firm and our personnel and volunteers do not offer legal suggestions. Nothing on our website or other products constitutes legal recommendations. For help finding an attorney, have a look at our attorney referral list.