STATESVILLE, N.C. — Katherine Garcia says she didn’t know anything about the house she rents being in foreclosure until lawyer letters came to her address.
“I was like … I didn’t do anything,” she told Action 9 investigator Jason Stoogenke.
The letters weren’t for her. She says they were for her landlord, threatening foreclosure.
“I don’t know anything, so I’m in the middle of something that’s not even my problem,” she said.
Garcia says the foreclosure sale is Thursday and that her lease for the house in Statesville is up a few weeks later.
“My family, they’re asking me, ‘What are we going to do? Are we going to stay? We going to leave?’ And I’m like, ‘I don’t know what to do,’” she said. “I feel like it’s stressful because, right now, I don’t know if I have to rush it to buy a new house or if I have to look for another place to rent.”
She says she would love to stay there and sign another lease with whoever buys it, but she can’t risk it. So, she’s looking for another place.
If you have a lease and your landlord goes into foreclosure, federal law says whoever buys the home typically has to honor your lease.
That said, if they plan to move into the home, they must give you a 90-day notice.
The buyer can kick you out more easily if:
- You don’t have a lease.
- The lease is “at will.”
- Your landlord is related to you.
- Your landlord has been letting you live there for very low rent.
On the flip side, if someone buys the home and you want out, you have to honor the lease as well unless you rent a house (or an apartment in a complex with fewer than 15 units). In that case, North Carolina law says you can break your lease 10-90 days after the foreclosure sale without penalty. Just make sure you give your landlord written notice.
If your landlord goes into foreclosure, that’s between them and the lender, but you should still do what you can to protect yourself:
- Make sure you have a lease in writing.
- Record your lease with the Register of Deeds.
- If you find out about the foreclosure, keep paying. Don’t take it as permission to skip rent.
- Reach out to the new buyer. See what their plans are and whether you can sign a new lease with them directly.
The same general rule applies even when landlords willingly get rid of their property (for example, sell it): the new owner usually has to honor your lease.
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