Tenant's Rights And Duties After Foreclosure
Find out what protections are available to tenants who are renting a home when it is sold through foreclosure.
There is a Nevada law that protect a tenant who is renting a home that is foreclosed upon and sold. NRS 40.255 requires the new owner after foreclosure to serve the tenant with a notice of change of ownership. The tenant can stay on the property for the period of the notice, which is typically sixty days. During that time, the new owner and the tenant have all the rights and duties of other Nevada landlords and tenants. If the tenant does not perform those duties, the landlord can evict the tenant (including by "summary" eviction). The tenant can leave at any time during the notice period without any obligation to the new owner. And the new owner is free to negotiate with the tenant for a new lease, purchase, or a payment to vacate.
Tenants (and new owners) should read this entire section carefully to educate themselves about their rights and duties under Nevada law.
Q&A - Tenants In Foreclosure
Can the person or bank who buys the house at foreclosure make me leave right away?
The new owner typically needs to give you a sixty-day notice to end your tenancy if you pay rent monthly or some longer period. If you pay rent by the week or some period shorter than a month, the notice should give you at least the number of days in that period. (NRS 40.255(2).)
What can I do if the new owner says I have to leave in less than sixty days?
You can send a letter telling the new owner about the state law that protects your tenancy. To download a sample letter, click one of the listed formats underneath the form's title below:
Keep a copy of the letter you send! Go to the post office and pay to mail the letter by certified mail, return receipt requested, so the new owner will have to sign for your letter. If you get a green receipt signed by the new owner in the mail, save it. You may need it later.
Remember, you must offer to pay the new owner your rent and otherwise live up to the terms of your lease and a tenant's duties under Nevada law.
TIP! If you've received a notice that the house you're renting is in foreclosure – either a Notice of Default and Election to Sell or a Notice of Trustee Sale – you may want to send one of the sample letters to the bank, the trustee, and anyone else listed on the notice you received, well before the house you're renting actually gets sold. Sometimes the bank buys the property back at the trustee's sale. So it makes sense to let the bank (and everyone else, for that matter) know as soon as possible that you are a tenant living on the property.
What can I do if the new owner serves me with a notice to leave within three days?
You should contact a lawyer immediately. Click to visit Lawyers and Legal Help.
If you are unable to hire a lawyer, call the new owner right away. Tell the new owner about the state law that protects tenants in foreclosure and say that, according to this law, you are entitled to at least a sixty-day notice. Tell the new owner that if the new owner tries to evict you, you will defend against the eviction based on this law.
TIP! You may even want to send the new owner a printout of this website section! Or you can give the new owner this website's address. Ask the new owner to review this section and the related section about evicting a tenant following foreclosure.
What happens if I do not pay the new owner rent or violate the terms of my lease?
The sixty days that the law allows you to stay on the foreclosed property is not a free pass to do anything you want. If you fail to perform your duties as a tenant, the landlord can evict you!
What must the sixty day notice say?
The Nevada law requires the new owner to provide you with specific information. The "notice of change of ownership" required by Nevada law must:
- Give you the contact information for the person you must pay rent to;
- Notify you that the lease with the previous owner or landlord continues in force until the notice expires;
- Notify you that your failure to pay rent or comply with the lease or Nevada law is a breach of lease that might result in your eviction.
Nevada's law applies only to "residential foreclosures" of "single family residences" of four units or less. (NRS 40.255(8).)
What if I do not want to stay sixty days?
You are not obligated to stay the full sixty days. Under Nevada law, after "residential (4 units or less) foreclosures," tenants can vacate at any time during the notice period without penalty. (NRS 40.255(6).) No record of eviction can be entered if you vacate within the notice period. (NRS 40.255(5).)
You also can try to negotiate to see what the new owner might be willing to offer if you agree to move out early. (NRS 40.255(6).) Many banks that foreclose, for example, offer some type of "cash for keys" option.
What if I wish to continue renting the property?
You can try to negotiate with the new owner. The new owner might be willing to sign a new lease or allow you to stay on the property longer than the sixty-day period. (NRS 40.255(6).)
When and how should I first be informed that the house I'm renting is in foreclosure?
For most tenants, the sixty-day notice should come as no surprise. Nevada law requires in "residential (4 units or less) foreclosures" that when the lender serves the owner (your landlord) with a Notice of Default and Election to Sell to start the foreclosure process, you get written notice of your right to break your lease and move at any time. (NRS 107.087.) This notice should come at least ninety days before the foreclosure sale. (NRS 107.080.)
Pay attention to any documents that are posted on your house or that you receive in the mail, even if they do not appear to be intended for you or are simply addressed to "tenant." Read all notices carefully to educate yourself about your rights!
What can I do if the new owner serves me with a summons and complaint asking a court to evict me?
You should contact a lawyer immediately. Click to visit Lawyers and Legal Help.
If you are unable to hire a lawyer, there are some steps you can take on your own. But first, look carefully through the entire packet of documents you received. The packet might include a court order that shortens to ten days your time to file an answer to contest the case. There might also be a court order setting the date and time for a hearing.
You can file your an answer with the court that says the new owner failed to give the notice required by Nevada law. To download an answer form, click one of the listed formats underneath the form's title below:
If the packet you received contains a court order setting a "show cause" hearing, you can file a Statement Why Temporary Writ Should Not Issue to get the details of your situation to the judge. To download the statement form, click one of the formats underneath the form's title below:
If there is a court date set with the papers you receive, make sure you attend the scheduled hearing and take with you at least:
- A copy of the letter you sent to the new owner (discussed above) and any other correspondence between you and the new owner;
- The certified mail receipt you received at the post office when you mailed the letter to the new owner (or, even better, the green return receipt signed by the landlord, if you received one);
- A copy of your lease, if you have one; and
- Receipts or other documents that prove your past payment of rent.
What can I do if a sheriff or constable arrives at my door to evict me?
If you were not served with an eviction notice or a summons and complaint, tell the sheriff or constable. Ask for time to go to court to get the order evicting you set aside. Contact a lawyer immediately. Click to visit Lawyers and Legal Help.
What happens to my security deposit?
When the property is sold, the previous owner must either (a) return your security deposit to you or (b) give it to the new owner. (NRS 118A.244(1)-(2).) In reality, this often does not happen. Consequently, Nevada law gives the new owner "the rights, obligations and liabilities of the former landlord as to any securities which are owed" when the property is sold or transferred. (NRS 118A.244(1).) In other words, the new owner is now responsible for your security deposits. And you can sue the new owner for your deposits if necessary.
For more information about the laws and procedures relating to security deposits, click to read Security Deposits.
What can happen if I do not leave by the end of the notice period?
If you do not leave voluntarily or reach an agreement with the new owner to stay, the new owner can evict you at the end of the sixty-day notice period. To evict you, the new owner must serve you with a summons and complaint and follow the "formal" eviction procedure. For more information about the eviction process, click to read Evicting a Tenant After Foreclosure.