What Are Your Rights If Your Landlord Is in Foreclosure?

As a tenant, you have the same rights if your landlord is in foreclosure as you do if your landlord is not. Just because the rental premises is the subject of a foreclosure proceeding does not mean you lose any rights as a tenant under New Jersey law.

New Jersey's Strong Tenant Protections

Tenants in New Jersey have very strong rights. In most cases, a tenant can only be evicted for “good cause” as defined by state law. This "good cause" requirement applies whether you have a written lease for a specific term or are a month-to-month tenant. It also applies if you rent a condominium or a single-family home.

The only general exception is for tenants in an owner-occupied building with no more than two rental units (not including the landlord’s unit). In that specific situation, a landlord may be able to evict without "good cause." For all other residential tenants, the protections are robust.

Your Tenancy Survives Foreclosure

Your rights as a tenant do not end when the property you are living in is in foreclosure. A new owner—whether it's a bank or an individual who buys the property at a foreclosure sale—steps into the shoes of your original landlord. They are bound by your existing tenancy and have the same obligations as the old owner.

An exception may arise if the new owner intends to personally occupy the premises (for example, if you rent a single-family home or a condominium that they wish to live in). However, even in that scenario, you are still entitled to proper legal notice before you can be evicted.

Do not let realtors, attorneys for your landlord, a lender, or a management company tell you that a foreclosure action has changed your rights. If that happens and you are threatened with eviction, it is crucial to see a lawyer with experience in landlord-tenant law for help.