Rights Of Renters Of Foreclosed Salem Oregon Real Estate

Posted By David Whitton @ Nov 5th 2010 9:49pm In: Foreclosures and Short Sales

As the number of foreclosures increases, so too, does the number of renters affected by those foreclosures. While most of the displaced occupants are homeowners, many are renters of Salem Oregon real estate owned by investors. These renters live in small apartment buildings, condos, and single-family homes, and their income levels and neighborhoods vary a great deal, ranging from upscale to Section 8 housing. Far too often these tenants are not aware of pending foreclosures until they are suddenly told to vacate the property.

A soon-to-be-displaced renter does have some rights, however. On May 9, 2009, President Obama signed the Protecting Tenants at Foreclosure Act, a bill which provides some protection--at least in terms of time--for renters. This legislation states that:

  • leases will survive a foreclosure--i.e., the tenant may stay on the premises until the end of the lease and that month-to month renters will have 90 days' notice before having to vacate.
  • cubefor Section 8 tenants, foreclosure is not cause for eviction. The new owner must respect existing leases and give 90 days' notice to expiring leases. In other words, the Section 8 renters' contract with the Housing Agency remains in effect even after foreclosure.
  • tenants with just cause rent-control clauses can rely on their ordinances to protect them. In this situation, a change of ownership alone is not enough to justify termination of a lease.
  • one notable exception to all of the above mentioned situations exists when the buyer of the foreclosed property intends to reside in the Salem Oregon real estate. In this instance the new buyer may terminate the lease with 90 days' notice.
  • the new owner must continue utility services for the Salem Oregon real estate and maintain the proper condition of the property. He/she is not allowed to change the locks on the home.

So what is a renter to do? These two options do allow some recourse for the affected tenant.

SMALL CLAIMS COURT:  It is possible to file suit against the former landlord since he/she is legally bound to deliver rental for the entire term of the lease. This type of suit requesting damages is usually done in Small Claims Court, and the tenant may seek redress for moving and housing search costs, application fees, and any difference in the rental amount. Generally speaking, however, monetary awards in these suits do no amount to a great deal and often stay on the books for years.

CASH FOR KEYS:   Rather than expend large sums to repair vacated property or pay eviction costs, many banks, if so requested by the tenant, offer to pay for-- in return for the tenant's promise to vacate quickly and leave the property in good repair--at least the following:

  • the security deposit and first and last month's rent
  • moving costs
  • utility deposits
  • temporary living quarters.

Tenants should be sure to get this agreement in writing and to uphold their part of the contract!



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David & Dewey Whitton
The Salem Real Estate Group
6444 Fairway Avenue SE
Salem, Oregon 93706

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