Faqs

Depends on if you’re the owner. If not, do you have a lease as the renter?

The law states you have 90 days to receive notice prior to being evicted from a foreclosure. Also, neither the landlord nor the bank is legally obligated to let the tenant know about the foreclosure (in a rental situation.)

If you have a lease, the owners (whoever they are or become) are obligated to allow you to remain in the property until the lease expires with three exceptions:

1. The lease can be terminated on 90 days notice if the unit is sold to a purchaser who will occupy the property.
2. The lease has fewer than 90 days remaining.
3. The tenancy is month-to-month or a tenancy at-will, in which case the new owners must provide the tenant with 90 days notice prior to eviction.

If you’ve been served notice, you have 90 days. If the new owners are unaware, and they try to force you out early, tell them about The Protecting Tenants in Foreclosure Act. PTFA was passed by Congress signed into law by the President in May, 2009 and expired December 31, 2015. (S.896, P.L. 111-22). On May 22nd, 2018, President Trump signed the bill into law to permanently extend the bill (S. 2155).

If you’re the owner of the home, and the home has gone to auction, your time is up. If you have no issue with the sheriff knocking on the door and physically removing you, stay until that happens if it means keeping a roof over your head. Otherwise the bank may offer you an incentive for leaving early and keeping everything in top working order called “Cash for Keys”.

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Question: My Prescott, AZ home is set for auction and there are two liens. One, IRS and the other is an HOA lien. I was told most likely, it will not sell. Is this true?

Answer:

There are “junior” and “senior” IRS liens. If the IRS lean is a senior lien, it means they filed it against you before you obtained the loan on the house. This is typically unpaid taxes. This will stick with you no matter what. If the lien is junior, this means the lien was filed after you obtained the loan on the house, and the IRS will have 120 days to redeem the house from the new owner after it auctions. (Meaning they’ll buy it for whatever was paid plus repairs)

Liens against property exist only because you’re not paying someone. They cannot necessarily procure your home just because they file a lien. For instance, the HOA can not claim your house for $300 in non-paid HOA fees. However, if you sold the house and received any profit, the filed judgement will show up during a title search, and will need to be satisfied during escrow.

Whomever said, “it will likely not sell” is correct, and incorrect. “Likely” being the key word. Some people do not want to risk the IRS redeeming the property during the 120 days after the trustee sale. However, the budgeting for redeeming properties is so low, it is very unlikely that the IRS will attempt to redeem the property, unless a significant financial advantage for redemption exists. Meaning if someone were to not have an emotional attachment to the property, the investment is likely to be a good one; knowing that either way the financial investment will be recouped by flipping or redemption.

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