Foreclosure takes place 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 financial obligation 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 company can purchase the residential or commercial property in foreclosure.

Tenants might 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 happening because of a foreclosure, tenants might get lost in the legal shuffle and not understand how to pay rent or who to get in touch with when there's a repair issue, which can put their housing at danger. The federal Protecting Tenants at Foreclosure Act (PFTA) was enacted to help secure occupants in this circumstance.

When Does the PFTA Apply?

The PFTA uses to most occupants when their landlords face foreclosure. The PFTA uses to all homes, consisting of single systems and multi-unit residential or commercial properties, and subsidized residential or commercial properties. And the law uses to occupants with any kind of tenancy.

The PTFA does NOT use to a tenant if:

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

• the occupant is the partner, parent, or kid of the person whose name is on the mortgage.
• the rental arrangement is not the result of an arm's length deal (example: the tenant and landlord had an individual, monetary, or organization relationship prior to getting in into the lease).
• the rent is well listed below market rate, unless the lease is minimized since it is subsidized
  
  How Do You Figure Out if a Foreclosure is Happening?
  
  Below are 3 choices for finding out more details about whether a foreclosure has actually been filed on the residential or commercial property you are living in.
  
  1. Call your county Register of Deeds.
• Use the Wisconsin Court's public online records (CCAP). Find out the legal name of the person or entity that owns the residential or commercial property. Your lease may have the correct name of the person who owns it, however another way to discover out the legal name of the titleholder is to browse on your city assessor's office/online lookup. Use that info to browse on CCAP. Click "I concur" and after that plug in either the personal name of the owner (under "celebration name") or the company name of the organization that owns the residential or commercial property (under "business name"). The city assessor's site 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 office at the City-County Building in Room 110, 210 Martin Luther King Jr. Blvd. Madison, WI. Staff must have the ability to assist you identify if the residential or commercial property is in foreclosure.
• The constable keeps records for upcoming sales on this page.
  
  What Are My Rights as an Occupant After a Foreclosure?
  
  The PFTA requires the new owner (the owner who purchases the residential or commercial property in the foreclosure) to supply the tenant with at least 90 days' notice before requiring the renter to leave, or, if the lease term extends beyond 90 days, allow the renter to remain in the unit for the lease term.
  
  If the brand-new owner will be residing in the residential or commercial property, the brand-new owner can terminate 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 might have the ability to stay in the unit under the existing lease and the brand-new owner is required to continue the housing help payment agreement. Transfer of ownership after a foreclosure is bad cause for ending a Section 8 lease.
  
  Foreclosure is not a legitimate factor for evicting a tenant. But a renter can be forced out if they don't pay lease or comply with the other requirements under the lease.
  
  The proprietor continues to be accountable for repair work until the residential or commercial property is sold in the foreclosure. Once offered, the brand-new owner needs to is accountable for repair work and gathering rent. Within 10 days of becoming the brand-new owner, the new owner must supply to the renter, in writing, the name and address of the person accountable for collecting lease and making repairs.
  
  Do I Still Need to Pay Rent?
  
  Yes. If occupants stop paying their lease on time while their property manager is facing foreclosure or after the foreclosure, the original or new owner might submit an eviction.
  
  Do I Pay Rent to My Landlord or the Bank?
  
  Tenants are bound to pay rent to the legal owner of their residential or commercial property unless a court has said that the occupant needs to pay lease to somebody else (for example, a "receiver"). Tenants are accountable for knowing who this is and paying rent to the right person. The most convenient method for a renter to identify a residential or commercial property's current owner is to contact their city assessor.
  
  If there's a difference between the bank and property owner or you are uncertain who to pay, you can compose a letter to everyone involved, consisting of the judge in charge of the foreclosure case, telling them how you are paying lease (or detail your attempts to pay rent) and to who, and why. You must consist of copies of any important documents and keep a copy.
  
  If you are unable to call the owner who you believe you need to be paying rent to, make sure to consist of that info in the letter and keep the rent owed in an account so that it can be paid completely when the owner or the court provides you the details 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 changes owners, the brand-new owner has 10 days to notify renters in writing of the names and addresses of the people who will collect rent 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 proprietor 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 Down Payment for Last Month's Rent?
  
  No, not unless you and your property owner enter into a composed agreement that allows you to utilize your down payment for the last month's rent. If you do not have a written arrangement and withhold your last month's rent, the property manager might file an eviction action against you.
  
  When you vacate, the person who legally owns the residential or commercial property should 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 landlord's foreclosure isn't a valid factor to evict you, you can still be forced out for non-payment of rent or violating 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 duration ends or before your lease ends, you can contact your property owner and ask if they will participate in a composed contract to mutually end 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 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 renters are residing in the foreclosed residential or commercial property, and the proprietor doesn't offer the tenant any notification when they require them to leave the residential or commercial property.
  
  After foreclosure, the court may presume the previous owner inhabits the residential or commercial property. The new owner can ask for a "writ of help" to remove the previous owner. This is different from a "writ of restitution," which gets rid of tenants after a judgement of eviction. When the constable shows up to get rid of the previous owner, they might find the occupant instead. Tenants have different rights than the previous owner who had a foreclosure action submitted versus them. Only a writ of restitution granted by a judge or court commissioner after a judgment for expulsion licenses a sheriff to get rid of a renter.
  
  You can describe the scenario to the court, constable, and brand-new owner, and show them any essential files such as your lease and proof of lease payments. You might likewise wish to contact a lawyer.
  
  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 defined variety of days to states a defense against the foreclosure filing.
• Once that duration is over, the court decides whether to accept or reject the defenses to the foreclosure. If the court turns down these defenses, they get in a judgment of foreclosure. NOTE: This is not the same thing as appointing a new owner.
• After the judgment of foreclosure, the landlord begins a "redemption period" where they can repay the amount owed to the bank. During this time, the proprietor 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 numerous months, depending upon the type of foreclosure submitted. NOTE: During the redemption duration, the property owner still collects rent and is accountable for repairs.
• Once the redemption period ends, if the proprietor hasn't paid back the cash, there is a constable's sale where the residential or commercial property is offered to a new owner or (typically) to the bank that sued for foreclosure.
• Once a residential or commercial property is offered, a hearing is scheduled to verify the sale.
• The verification of sale hearing takes location and, if the sale is validated, leads to the "date of verification sale." The title of the home is transferred at the hearing. The new owner may be happy to agree to a brand-new lease, but that is not .
• The court might approve the new owner a "writ of support" in the verification of sale hearing in step # 8, which will enable the new owner to go to the sheriff 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 article.
  
  -- * The Tenant Resource Center is not a law practice and our personnel and volunteers do not provide legal suggestions. Nothing on our site or other materials constitutes legal guidance. For help finding a lawyer, have a look at our lawyer referral list.