Renters Can be Victims of Foreclosure
By Jonathan Ginsberg, Atlanta Bankruptcy Attorney on Dec 10, 2008 in Bankruptcy Protection & Automatic Stay, Georgia
Last week the Atlanta Journal Constitution published an important article entitled “Foreclosures Reach Renters.” The article described the plight of tenants who had regularly and reliably paid monthly rentals for homes but were nevertheless faced with eviction if the property owner failed to make mortgage payments, resulting in a foreclosure.
Georgia, like most “non-judicial” foreclosure states, allows a lender to foreclose without going to court. Instead, the lender need only publish notice for four consecutive weeks of the pending foreclosure in the legal newspaper in the county where the property is located. The property can then be sold at auction on the courthouse steps on the first Tuesday of the next month. Foreclosures in Georgia can be completed in less than 45 days.
The official county newspaper, by the way, is often a small publication that is not widely available. In Dekalb County, for example, the official county organ is called “The Champion Newspaper” and does not display foreclosures online. Gwinnett County (another metro Atlanta county) uses the Gwinnett Daily Post for foreclosure notices and does publish foreclosure notices online.
Unfortunately, Georgia law does not provide for any kind of required notice to tenants. Over the years I have met with a number of tenants who paid their rent, only to discover that the property owner was using that rent for other purposes.
Once the property is foreclosed the new owner (usually the foreclosing lender) will tell the tenant that he has to move. Not infrequently, the first time a tenant discovers that there is a problem is a written demand for possession. If the tenant will not leave voluntarily, then the new owner will file eviction papers. A tenant can find himself homeless in as little as 21 days in a worst case scenario.
According to the AJC article, some states and cities are passing laws that give some protections to tenants caught in the middle of the foreclosure process. The vast majority of jurisdictions, however, have no such protections.
How can you protect yourself? Be alert to a flurry of advertisements from bankruptcy lawyers arriving in your mailbox. Ask questions if you see real estate investors scoping out your property. Finally, take the time to identify the official legal newspaper of the county where you live and read the foreclosure notices occasionally. And if you sense that there is a problem, don’t want for bad things to happen - ask questions and act according to your own best interest.
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