Okay, so you're not a homeowner. You have been renting for several years and now the landlord tells you that he/she is going through foreclosure, but for right now he is going to agree to a short sale of the property. (A short sale is an agreement with the bank to allow you to sell your house for less than is owed on the mortgage).
So you're wondering "Are there any special protections for me as a tenant of a house going into foreclosure/ or short sale?"
Well, there is a federal law, the Protecting Tenants at Foreclosure Act, which gives additional rights to tenants living in a property that changes ownership due to foreclosure. This law requires a minimum of 90 days' notice to month-to-month tenants after the foreclosure has been completed. Tenants who have a bona fide lease are entitled to remain until the lease expires.
Now, it's different with short sales. You have no foreclosure act available to you because the foreclosure was never completed. So, the new owner taking title of the house by means of the short sale now becomes the landlord and can decide to continue your tenancy or terminate it. And yes, he would still have to follow the usual 30-60 day notice period if you have been a tenant for more than one year.
So there you have it in a nut shell. If you find yourself in this situation and need to find another place to lease, I will be glad to assist you. I specialize in the Stevensville and surrounding areas and have access to rentals in the area. Feel free to contact me, Lisa Longest,at 443-786-4200 or at the office located at 1241 Shopping Center Rd, Stevensville, MD. 21666