DC Tenants’ Rights in Foreclosure

November 18, 2008

What happens to tenants in the District of Columbia when their landlord is foreclosed upon?

Fortunately, D.C. ‘s tenant-friendly rental laws offer protection in this situation. In many jurisdictions, the new owner can evict the tenants after taking possession of the property. But, tenants in D.C. cannot be evicted merely because ownership has changed hands due to foreclosure.

The law

The Rental Housing Act of 1985 (DC Code Â§ 42-3505.01) states the circumstances under which a landlord in the District of Columbia may validly evict a tenant.

Under this law, foreclosure is not a legally valid reason to evict a tenant.

In other words, it is illegal for a landlord to evict tenants in the District solely because the dwelling is being foreclosed.

Payments during foreclosure process

Foreclosures take time– sometimes several months– to complete.

In most cases, tenants must continue making timely rental payments to their original landlord during the foreclosure process.

If a renter fails to make timely rental payments, he or she can then be evicted for failure to pay rent.

Payments after the foreclosure

After a foreclosure, the new owner becomes the tenant’s new landlord. Sometimes the new owner is a person; sometimes it is the foreclosing lender.

Tenants should pay rent to the new owners once the foreclosure process is complete.

What tenants should do

If you are a tenant who has been notified that the dwelling you live in is in foreclosure, you should take the following steps:

Let the new owner know you are there. If you have received a notice stating that the dwelling you live in is under foreclosure, notify the party who sent you the notice that you are a tenant in the dwelling.

Assert your rights in writing. In addition to letting the party know you are living in the dwelling, you should also notify them that you are asserting your legal right to stay in the dwelling. You can use this form. Send this form to the party that sent you the notice about the foreclosure. To be safe, send it certified mail, return receipt requested so you can prove it was received.

Rent payments during foreclosure. Foreclosures take time. During the time the foreclosure is in process, you should continue sending your payments to your original landlord. Be sure to send in your rent payments on time. If you do not make your payments on time, you give the old and possibly the new owners grounds to evict you.

Rent payments after foreclosure. If (after the foreclosure) your home has a new owner or is owned by the bank, you should start sending your rent to the new owner or to the bank. Try to contact the bank or its attorney and ask for the address where you can pay rent

Send written requests to the new owner, bank, and / or bank’s attorney asking for complete information as to where you should send your rent payments and how you should make payments payable.

Keep copies of all documents. It is very important that you keep copies of all documents you send or receive, including: the notice of foreclosure, your statement that you want to stay in your apartment, and your letters requesting information about where to send your rent payments.

[The foregoing is partially excerpted from a press release from DC's Office of the Tenant Advocate. For the complete version, click here.]