Tenant’s Rights Against Mortgage Foreclosure


A tenant is a person who has been given the right to use and occupy rental property  owned by another person, usually through a lease or rental agreement. The tenant’s right  to exclusive enjoyment of the property is typically granted in exchange for an agreed upon amount of money and is limited to a fixed period.1 

A mortgage involves the transfer of an interest in land as security for a loan or other  obligation. The mortgagee, usually a financial institution, is the provider of the loan or  other interest given in exchange for the security interest. Normally, a mortgage is paid in  installments that include interest and a payment on the principal amount borrowed.  Failure to make payments results in the foreclosure of the mortgage.2 Foreclosure is the  legal process by which a lender attempts to recover the amount owed on a defaulted loan  by taking ownership of the mortgaged property and selling it.3 

What are the rights of tenants of the foreclosed property? 

Tenants have certain rights when the property they are renting is facing foreclosure. These rights  are outlined in the Housing and Development Act and the Residential Property Act. 

  1. Tenants must be given at least 90 day notice before they are required to vacate the property. 2. If the property is sold to a new owner, the new owner is required to honor the existing lease  agreement. 
  2. If the new owner wants to terminate the lease, they must give the tenant at least 90 day  notice and compensate the tenant for any reasonable relocation expenses. 
  3. Tenants cannot be evicted from the property without a court order. 

Important Note 

It is important to remember that tenants are not responsible for paying any outstanding mortgage  on the property, and they cannot be held liable for the foreclosure. However, tenants should  communicate with the Landlord or the financial institution as soon as possible to understand the  situation and also to protect their rights as tenants. 


  1. http://bit.ly/3DnkPz3 
  2. https://www.law.cornell.edu/wex/mortgage 
  3. https://www.investopedia.com/terms/f/foreclosure.asp 
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