I Foreclosed on a House, What happens to exist sect. 8 tenant?

[Daniel Fleming]

I made a private Hard Money loan on a single-family property in Birmingham Alabama. Our borrower purchased the property, rehabbed it, and put a section 8 tenant inside. 

Our borrower defaulted and we took the property to foreclosure. The tenant is now sending me rents, and Section 8 is sending their portion as well. My question is: what happens to the tenant now? I have never received a copy of the lease, info on tenant, etc. 

I'm trying to figure out if I am OK to either 1)evict/sell retail  Or 2) renew lease / sell turnkey. 

[Jon Holdman]

This is true for a sale, but generally not for a foreclosure.  A foreclosure wipes out leases.  The Protecting Tenants At Foreclosure Act was put in place in 2009 to give tenants protection after a foreclosure, but it expired at the end of 2014.  Here are a couple of links:

http://nlihc.org/issues/foreclosure

http://nlihc.org/sites/default/files/FactSheet_PTF...

According to the second link, Texas provides 30 days protection for tenants after a foreclosure.  As far as I know, nothing has been put in place after the PTFA act expired.   Here's another link mentioned legislation introduced in Feb of this year on the topic.

http://nlihc.org/press/releases/7507

Doesn't seem likely that will make much headway in DC.

Probably good to consult with a landlord/tenant attorney before taking any action.