(Adapted from the Equality Housing Center's Know Your Rights as a Renter in Pennsylvania handbook)
If your landlord stops paying the mortgage, foreclosure proceedings may begin. If the owner of a property fails to make a payment arrangement on municipal debt levied on the property, that property may be sold at a Sheriff Sale to allow the municipality to collect on that unpaid debt. These debts can include outstanding water and sewer bills, school taxes, and property taxes.
When a tenant is living in a property that has been foreclosed or sold at Sheriff sale, the new owner (including a bank) must abide by certain rules. The new owner cannot change the locks or otherwise take action to force the occupants out into the street. You can only be locked out by a Court Order. The owner must go to Court and file an Action in Ejectment. This is completely separate from the foreclosure proceedings and it has similarities but is different from a landlord-tenant eviction proceeding.
If notices of a possible foreclosure are delivered to or posted on your property, contact the sender right away and let them know that you are a tenant. You should also contact your landlord.
You may get confusing information from your landlord about the foreclosure. For example, the landlord may ask you to prepay your rent in violation of your lease or rental agreement. Your landlord may also tell you that the foreclosure is a “mistake,” or say that the problem has been resolved. Do not get tricked into paying rent to the former owner after the property has already been sold to another party. To be sure, check with the Crawford County Recorder of Deeds (814 333-7338). You may also want to check court filings against your landlord.
Call Legal Aid or consult with an attorney to find out what your options are, how long the foreclosure may take and how much time you have to move after a foreclosure or Sheriff sale.
If your landlord is unable to pay the mortgage, the landlord may also not be paying the utilities, and your utility service may be shut-off. You should immediately contact the utility and the landlord if a shut-off notice is sent or if your utilities are shut off. You may be able to avoid the shut-off by contacting the utility and paying them directly, even if the utilities are in the landlord’s name. See Know Your Rights: Utility Shut-Offs page.
Do not get scammed. If someone contacts you claiming to be the new property owner, ask to see documents that show ownership. Do this before paying rent, signing a new lease agreement, or allowing them to come inside the property. Scammers review publicly available foreclosure recordings and may contact tenants living in foreclosed properties to falsely demand rent.
Negotiate a payment to move out. If the new owner wants you to move out, ask if they will give you some money to help pay moving expenses. This is sometimes referred to as a “cash for keys” agreement. Sometimes the bank or the new owner after a foreclosure sale is willing to do this if you agree to move out within a certain period of time.
You should remove all of your belongings when you move out so the new property owner does not take or destroy them.
If the landlord did not refund your security deposit or transfer it to the new owner after the foreclosure sale, you may need to take legal action to get back your deposit. See Know Your Rights: Security Desposit page.