Foreclosure happens when debtors do not pay the mortgage on a home they own, and their loan provider (normally, 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 against the owner of the residential or commercial property. The bank that is owed the mortgage, or a specific or company can acquire the residential or commercial property in foreclosure.

Tenants may not understand that a foreclosure has actually been submitted on the residential or commercial property they are renting. Even if they discover that an ownership change is taking place since of a foreclosure, tenants might get lost in the legal shuffle and not understand how to pay lease or who to get in touch with when there's a repair problem, which can put their housing at risk. The federal Protecting Tenants at Foreclosure Act (PFTA) was enacted to help safeguard renters in this circumstance.

When Does the PFTA Apply?

The PFTA uses to many renters when their landlords deal with foreclosure. The PFTA applies to all homes, consisting of single units and multi-unit residential or commercial properties, and subsidized residential or commercial properties. And the law applies to occupants with any type of occupancy.

The PTFA does NOT use to an occupant if:

- the tenant is the person whose name is on the mortgage (this is uncommon, a lease is various than the mortgage).

• the renter is the spouse, moms and dad, or kid of the person whose name is on the mortgage.
• the rental agreement is not the result of an arm's length deal (example: the tenant and proprietor had a personal, financial, or business relationship prior to participating in the lease).
• the lease is well below market rate, unless the rent is decreased because it is subsidized
  
  How Do You Find out if a Foreclosure is Happening?
  
  Below are three alternatives for learning more details about whether a foreclosure has actually 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). Determine the legal name of the individual or entity that owns the residential or commercial property. Your lease might have the proper name of the individual who owns it, but another method to learn the legal name of the titleholder is to search on your city assessor's office/online lookup. Use that info to browse on CCAP. Click "I agree" and after that plug in either the personal name of the owner (under "celebration name") or business name of the organization that owns the residential or commercial property (under "service name"). The city assessor's website has various ways to recognize the residential or commercial property (parcel number, legal description, street address), so use the assessor's details to comb through all that while considering what might be on CCAP.
• Go to the Register of Deeds office at the City-County Building in Room 110, 210 Martin Luther King Jr. Blvd. Madison, WI. Staff ought to have the ability to assist you identify if the residential or commercial property remains in foreclosure.
• The sheriff keeps records for upcoming sales on this page.
  
  What Are My Rights as a Tenant After a Foreclosure?
  
  The PFTA needs the new owner (the owner who buys the residential or commercial property in the foreclosure) to the renter with a minimum of 90 days' notice before requiring the occupant to vacate, or, if the lease term extends beyond 90 days, allow the tenant to stay in the unit for the lease term.
  
  If the brand-new owner will be residing in the residential or commercial property, the new owner can end the lease with 90 days' notification even if the lease term extends beyond 90 days.
  
  Tenants with a Section 8 Housing Choice Voucher have extra rights under the PFTA. They may have the ability to remain in the system under the existing lease and the brand-new owner is needed to continue the housing support payment agreement. Transfer of ownership after a foreclosure is bad cause for terminating a Section 8 lease.
  
  Foreclosure is not a valid factor for evicting an occupant. But an occupant can be kicked out if they do not pay lease or adhere to the other requirements under the lease.
  
  The property owner continues to be accountable for repairs until the residential or commercial property is sold in the foreclosure. Once offered, the brand-new owner needs to is responsible for repairs and collecting lease. Within 10 days of becoming the brand-new owner, the new owner needs to offer to the renter, in composing, the name and address of the individual responsible for collecting rent and making repair work.
  
  Do I Still Need to Pay Rent?
  
  Yes. If occupants stop paying their rent on time while their property manager is facing foreclosure or after the foreclosure, the original or brand-new owner might submit an expulsion.
  
  Do I Pay Rent to My Landlord or the Bank?
  
  Tenants are obliged to pay rent to the legal owner of their residential or commercial property unless a court has said that the renter ought to pay rent to somebody else (for example, a "receiver"). Tenants are responsible for knowing who this is and paying lease to the ideal individual. The simplest way for an occupant to identify a residential or commercial property's existing owner is to call their city assessor.
  
  If there's an argument in between the bank and property owner or you are unsure who to pay, you can write a letter to everyone involved, consisting of the judge in charge of the foreclosure case, informing them how you are paying rent (or information your attempts to pay lease) and to who, and why. You should include copies of any crucial documents and keep a copy.
  
  If you are not able to get in touch with the owner who you believe you should be paying lease to, be sure to include that information in the letter and keep the rent owed in an account so that it can be paid in full when the owner or the court offers you the information on how to pay lease.
  
  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 individuals who will gather lease and are accountable for repairs and maintenance 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 receive 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 last in court.
  
  Can I Use My Security Deposit for Last Month's Rent?
  
  No, not unless you and your property owner participate in a composed agreement that enables you to utilize your security deposit for the last month's lease. If you do not have a written agreement and withhold your last month's lease, the property owner may submit an eviction action versus you.
  
  When you vacate, the individual who legally 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 manager's foreclosure isn't a legitimate reason to evict you, you can still be kicked out for non-payment of lease or breaching your lease.
  
  Can I Move Before the Lease Ends or Remain In the Unit After the Foreclosure?
  
  If you wish to move before the 90-day period expires or before your lease ends, you can call your property owner and ask if they will enter into a written arrangement to mutually terminate the lease early. Similarly, if you wish to stay 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 might not know that renters are residing in the foreclosed residential or commercial property, and the property manager doesn't offer the tenant any notification when they need them to leave the residential or commercial property.
  
  After foreclosure, the court may assume the previous owner inhabits the residential or commercial property. The brand-new owner can ask for a "writ of support" to remove the previous owner. This is different from a "writ of restitution," which removes renters after a judgement of eviction. When the sheriff arrives to remove the previous owner, they may find the occupant rather. Tenants have various rights than the previous owner who had a foreclosure action submitted versus them. Only a writ of restitution approved by a judge or court commissioner after a judgment for eviction authorizes a sheriff to remove an occupant.
  
  You can describe the situation to the court, constable, and new owner, and show them any crucial files such as your lease and proof of lease payments. You might likewise desire to get in touch with an attorney.
  
  Here is a detailed overview of the foreclosure process:
  
  1. The proprietor defaults on payment of a mortgage loan.
• A foreclosure action is submitted in court by the bank.
• The property manager has a defined variety 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 get in a judgment of foreclosure. NOTE: This is not the very same thing as designating a new owner.
• After the judgment of foreclosure, the landlord begins a "redemption period" where they can pay back the quantity owed to the bank. During this time, the property manager might cure the default or sell the residential or commercial property, ending the foreclosure and permitting the landlord to continue as owner. A redemption period can be a number of months, depending upon the type of foreclosure submitted. NOTE: During the redemption period, the property owner still gathers lease and is accountable for repairs.
• Once the redemption period ends, if the property manager hasn't repaid the money, there is a constable's sale where the residential or commercial property is sold to a brand-new owner or (usually) to the bank that took legal action against for foreclosure.
• Once a residential or commercial property is sold, a hearing is scheduled to validate the sale.
• The confirmation of sale hearing happens and, if the sale is verified, results in the "date of verification sale." The title of the home is transferred at the hearing. The brand-new owner might be willing to accept a brand-new lease, but that is not needed.
• The court might approve the brand-new owner a "writ of help" in the verification of sale hearing in action # 8, which will permit the brand-new owner to go to the constable and have the previous owner removed if they live in the residential or commercial property.
  
  More in-depth information about foreclosure and the PFTA is offered in this Wisconsin Bar short article.
  
  -- * The Tenant Resource Center is not a law practice and our staff and volunteers do not offer legal advice. Nothing on our site or other products makes up legal recommendations. For assistance finding a lawyer, take a look at our lawyer referral list.