Foreclosure

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.

The state law allows landlords to ask tenants to sign new rental agreements if they are going to stay on in units.

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.

• Washington State Law SB 5810
• RCW 61.24.146

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. Navigate to our Legal Assistance Guide webpage for more information.

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. 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 for more information on how to access legal services in your area.

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-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.

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: Foreclosure – for Section 8 Tenant to Send to the Landlord.

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. Navigate to our Legal Assistance Guide webpage and seek immediate legal advice if you are a Seattle tenant living in a property facing foreclosure.

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.

Tenants are entitled to 60 days’ written notice to vacate after the foreclosure sale under state law.

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.

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.

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. 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.

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.

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.

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.

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.

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.

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?.

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. Navigate to our Legal Assistance Guide webpage to for resources to seek immediate legal advice if you are a Seattle tenant living in a property facing foreclosure.

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. State law requiring 60-days’ notice only applies 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.

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. Navigate to our Small Claims Court webpage for more information.

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. (Navigate to our Small Claims Court webpage for more information.) 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.

Maybe. If you are a bona fide tenant, you are entitled to receive 90-days’ notice under federal law. Generally, you are considered a bona fide tenant if a) you signed a rental agreement at fair market rent, b) you are not  the child, spouse, or parent of the previous owner, and c) you did not arrange any significant discounts or special arrangements with the previous owner. Tenants who receive rental subsidies (such as a Housing Choice Voucher) can be bona fide tenants. You can read the Protecting Tenants at Foreclosure Act (PTFA) for more information.

If you are not a bona fide tenant, you are entitled to receive 60-days’ notice to vacate the property under Washington State law. 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, navigate to our Legal Assistance Guide webpage for legal assistance ideas.

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.

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.

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