Tenants, foreclosure, and eviction

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Massachusetts Law Reform Institute

Foreclosure is when a bank or other lender (“foreclosing entity”) takes back a property from the owner. Foreclosures usually happen because the owner did not make the required mortgage payments. The foreclosing entity often buys the property at the foreclosure and then sells the property to a new owner.

If you are a tenant and you think that your apartment may be at risk of foreclosure, there are steps you can take to protect yourself.

If you are a former owner of a foreclosed property, your legal rights are not the same as tenants. To learn more, see Homeowners Facing Foreclosure.

What should I do if I think my apartment will be foreclosed?

If you think your apartment is in a property that may be foreclosed, protect yourself right away:

  • Keep paying your rent. Pay your rent by check or get a receipt as proof you paid.
  • Find or get proof that you paid a security deposit.
  • Keep all notices, proof of rent payment, and all communication between you and the owner in a safe place.
  • If you think you may be able to buy your apartment, take a course for first-time homebuyers. 
What can I do after foreclosure?

Your options after a foreclosure depend on your rental agreement, what the new owner wants and does, and what you want. 

You could:

  • Stay and continue renting. 
    Most tenants in Massachusetts have the right to stay and keep renting after a foreclosure. Be careful! If someone other than a bank asks you for rent, ask for proof that they own or manage your building.
  • Stay until a court hears your eviction.
    A new owner may try to evict you quickly to sell the property or rent to someone else. You only need to move out if a court orders you to leave.  
  • Take “cash for keys.”
    The new owner may offer you money and a written agreement to leave by a certain date. Read the agreement carefully. It may ask you to give up your security deposit, your right to sue, or other things. You do not have to accept it and may be able to negotiate a better agreement that gives you more money and time to move.
  • Buy the property
    Buying the property may not be easy. But if it is a good price and you can afford it, first-time homebuyer programs and other non-profit loan programs can help. 

See Your Options After a Foreclosure (Legal Tactics, Chapter 18: Tenants and Foreclosure). Learn more about your options before you decide what to do.


What can I do if I have a Section 8 or another housing subsidy?

If you have a Section 8 or other subsidy, you can stay and pay the same amount of rent after a foreclosure. The new owner cannot increase your rent.  

A Section 8 tenant, tenant at will, or a “Bona Fide Tenant” can usually only be evicted for “just cause.” An owner has “just cause” to evict you if you:  

  • Refuse to allow them the owner to inspect, repair, or show property to potential buyers.  
  • Create a nuisance at the property.  
  • Use the property for an illegal purpose.  
  • Refuse to renew your lease.  
  • Do not pay rent.  
  • Do not follow your lease.

If the foreclosing entity buys the property at the foreclosure, it has to take over your lease and sign a contract with the housing authority or agency that administers your housing subsidy. 

Whom should I pay rent to?

To avoid eviction for nonpayment of rent, you should pay the old owner until the foreclosure. After the foreclosure, pay rent to the new owner. Pay your rent by check or get receipts. If you do not know where to pay rent, put your rent in a savings account. Learn more about the type of account to put your rent into, see Withhold Rent.

How do I find out who the new owner is?

The new owner should send tenants a notice that tells them the new owner’s name, how to contact the new owner, and where to send the rent. If you do not get a notice, look for one posted in the common area of your building. 

Can I be evicted because my apartment is in a building that was foreclosed?

If a new owner purchases the property after foreclosure, they cannot force you out, lock you out, or shut off your utilities. The new owner must file an eviction case in court and get a court order for eviction. You will have a chance to tell a judge why you should not be evicted. But foreclosure evictions are complicated. 

What if a new owner tries to evict me?

If the new owner tries to evict you, they must send you a Notice to Quit. This notice asks you to leave in a certain number of days. You do not have to leave by the date on this Notice.

If you stay past the date in the Notice, the new owner can then start an eviction case against you by serving you with a Summary Process Summons and Complaint. The court and the new owner will send you a notice that tells you the date of the first court event. You must attend the court event. If you do not attend or arrive late, the court will default you, which will then allow the owner to get a judgment and a court order to evict you.

File an “Answer” in the court as soon as you get the Complaint. Your Answer tells the court your side of the story. It is very important to file an Answer. For more, see Eviction Basics and Notices to Quit.

Important: If a person or real estate investment company buys the property, you have fewer rights than if the foreclosing entity buys it. If a foreclosing entity has entered into a binding agreement (cannot be changed) with a bona fide third party to purchase foreclosure property, you could be evicted without just cause. 

For more information, see What the new owner must do to evict you.

Can the new landlord lock me out?

No. The new owner may not lock you out. They are only allowed to enter your apartment if you give them permission, if it is an emergency, or if they have a court order. 

Can the new owner increase my rent after foreclosure?

It depends. While your current lease is still active, the new owner cannot raise your rent without court approval. To raise your rent before your lease term is up, the new owner must take you to court and prove that the rent you pay now is “unreasonable.”

If you have a Section 8 voucher or other subsidy, the new owner may not increase your rent. Keep paying the same rent as before. And tell your housing program about the foreclosure. 

My old landlord paid utilities. Will I now have to pay utilities myself?

If the old owner paid for your utilities, the new owner must also pay for the same utilities. If a bank is the new owner, it must pay for utilities. The new owner cannot cut off your utilities. In Massachusetts, usually tenants only pay for utilities if they have agreed to do so in writing. For more information about your utility rights, see Understanding Utilities as a Tenant.

Who is responsible for repairs?

During the foreclosure process, the foreclosed owner (your old landlord) is responsible for the maintenance of your building. After the foreclosure, the new owner is responsible. If repairs are needed, notify the owner in writing or by email to ask that repairs be made. You may later need proof that you notified the owner about the repairs needed. For more information, see Repairs after Foreclosure.

What happens to my security deposit after foreclosure?

If you paid a security deposit to the old owner, you should not lose it. The old owner should transfer the security deposit to the new owner. If they do not, the new owner must credit you for the amount you paid and pay interest on your deposit. For more information, see How to Get Your Security Deposit Back After Foreclosure.

This article is an overview. For more detailed information, see Legal Tactics, Chapter 18: Tenants and Foreclosure.


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