Protecting Renters Rights

As the number of foreclosures increases, so too, does the number of renters affected by those foreclosures. While most of the displaced occupants are homeowners, many are renters of Magnolia TX real estate owned by investors. These renters live in small apartment buildings, condos, and single-family homes, and their income levels and neighborhoods vary a great deal, ranging from upscale to Section 8 housing. Far too often these tenants are not aware of pending foreclosures until they are suddenly told to vacate the property.

A soon-to-be-displaced renter does have some rights, however. On May 9, 2009, President Obama signed the Protecting Tenants at Foreclosure Act, a bill which provides some protection–at least in terms of time–for renters. This legislation states that:

  • leases will survive a foreclosure–i.e., the tenant may stay on the premises until the end of the lease and that month-to month renters will have 90 days’ notice before having to vacate.
  • for Section 8 tenants, foreclosure is not cause for eviction. The new owner must respect existing leases and give 90 days’ notice to expiring leases. In other words, the Section 8 renters’ contract with the Housing Agency remains in effect even after foreclosure.
  • tenants with just cause rent-control clauses can rely on their ordinances to protect them. In this situation, a change of ownership alone is not enough to justify termination of a lease.
  • one notable exception to all of the above mentioned situations exists when the buyer of the foreclosed property intends to reside in the Magnolia TX real estate. In this instance the new buyer may terminate the lease with 90 days’ notice.
  • the new owner must continue utility services for the Magnolia TX real estate and maintain the proper condition of the property. He/she is not allowed to change the locks on the home.

So what is a renter to do? These two options do allow some recourse for the affected tenant.

SMALL CLAIMS COURT:  It is possible to file suit against the former landlord since he/she is legally bound to deliver rental for the entire term of the lease. This type of suit requesting damages is usually done in Small Claims Court, and the tenant may seek redress for moving and housing search costs, application fees, and any difference in the rental amount. Generally speaking, however, monetary awards in these suits do no amount to a great deal and often stay on the books for years.

CASH FOR KEYS:   Rather than expend large sums to repair vacated property or pay eviction costs, many banks, if so requested by the tenant, offer to pay for– in return for the tenant’s promise to vacate quickly and leave the property in good repair–at least the following:

  • the security deposit and first and last month’s rent
  • moving costs
  • utility deposits
  • temporary living quarters.

Tenants should be sure to get this agreement in writing and to uphold their part of the contract!


Whether you are new to the Magnolia Texas real estate market, thinking of moving up, or you’re an experienced investor, Pam Sitterly has the expertise, proven track record, and resources to help you buy Magnolia TX real estate for sale or market Magnolia TX homes for sale. Enthusiasm, knowledge of the area and personal concern for her client’s interests combine to make Pam an outstanding resource for your real estate transactions.


Pam works extensively to help Buyers and Sellers meet their Magnolia Texas real estate goals. For more information about buying or selling your Magnolia TX home, please call Pam at 281-723-0324 or via email with this convenient contact form.


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