Both tenants and third party investors should be very happy that a new federal law goes into effect on June 23, 2018, that protects tenants in foreclosure. Basically additional notice is required and the tenants even have the right to remain in the unit for the remainder of the lease. A copy of the law (that had previously expired in 2014) is at the link below for the specifics:
While titled the “Economic Growth, Regulatory Relief, and Consumer Protection Act,” the Act is generally called “the Crapo bill” after its lead sponsor, Republican Senator Mike Crapo of Idaho. With a few exceptions discussed below, the changes either carve out exceptions from compliance with consumer statutes or codify consumer protections that at least certain industry players are already following on their own.
Tenant Protections After Foreclosure of Landlord’s Property
Effective June 23, 2018, section 304 of Public Law No. 115-174 restores and revives the Protecting Tenants at Foreclosure Act, Public Law No. 111-22, that had sunset at the end of 2014. The 2018 legislation once again gives tenants legal protection when the landlord’s building is foreclosed.
Tenants can remain in their units for the remainder of their leases despite the building’s foreclosure, unless the buyer at the foreclosure sale intends to occupy the unit as a primary residence. All tenants including those without leases have a right to 90 days’ notice before eviction.