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Renter’s Rights Under Foreclosure

(credit:  Scott Olson/Getty Images)

(credit: Scott Olson/Getty Images)

By Amy E. Feldman

PHILADELPHIA (CBS) - You’ve always paid your rent on time, but not so your landlord.

With an estimated 30,000 apartment buildings in foreclosure, many tenants who have been paying their rent regularly find their housing in jeopardy.

If you are a renter, how do you protect yourself against the financial misfortunes of the owner? A federal law created in 2009 protects the rights of renters of property that has gone into foreclosure – to a point.

The Protecting Tenants at Foreclosure Act gives a tenant the right to stay in the property for the remaining lease term if the lease is to end within 90 days, or up to 90 days to vacate if the term isn’t scheduled to end within that time.

Ask where your security deposit will be held, and add language stating that if the apartment is foreclosed you have the right to receive the deposit back. And make sure to have an out clause allowing you to leave if the landlord fails to maintain the property or the landlord makes a filing for bankruptcy to avoid the penalty of home loss caused by someone else’s financial instability.