What happens to leases after foreclosure

[Chris Eaker]

When a rental property is foreclosed on, do the leases get wiped out or do they remain in effect? 

[Kyle J.]

There's not one answer to this question. There used to be a federal law (Protecting Tenants at Foreclosure Act) that addressed this issue, but that law expired at the end of 2014. Now, it can depend on a number of factors, such as: what state the property is located in, whether the new owner intends to occupy the property or not, whether the tenant is Section 8 or not, whether the tenant is related to the previous mortgage holder, whether the lease was entered into before or after the previous owner obtained the mortgage, etc.