Cook County in neighboring Illinois has an angry sheriff. Two weeks ago, Sheriff Tom Dart ordered his deputies to stop evicting people from foreclosed properties they didn’t own, “because many are renters who did nothing wrong”. Dart told an Associated Press reporter he thinks he’s the first sheriff in a major metropolitan area (Cook County includes Chicago) to stop participating in foreclosure evictions. By Illinois law, renters must be notified that their residence is in foreclosure, and they must be given 120 days to move; Dart says that, all too often, the law is ignored.
As a bankruptcy lawyer in Indiana, I find that a good part of my work involves foreclosure issues, and, related to those are tenant issues. What I’ve found out about the situation here in Indiana (See Renters’ Rights In Foreclosure) is that, if the landlord’s mortgage pre-dates the lease with the tenant, the tenant has no legal right to stay on the property, so long as 30 days’ notice is given. This situation can cause untold grief to the tenant, because, with an eviction notice on the record, it’s difficult to find a new place to rent. For renters who worked hard to make their payments on time and then are suddenly evicted, it’s terribly unfair. The irony in all this is that lenders should want tenants in the property, because that increases the resale value! I think Dart must be right in his belief that banks are simply not doing the necessary research to find out whose name in on the mortgage before serving eviction notices
Now, if it’s the tenant who’s behind on the rent, that’s a different story, and the landlord would send a Notice to Vacate, and even Dart’s deputies follow through with eviction notices in that case. But, where property owners are the ones behind on their payments, innocent tenants often end up paying the price.