Super long fixed term tenant eviction after foreclosure in GA

1 Reply

Hi all,

Long time lurker first time poster.

I am looking to get a foreclosure property (courthouse steps). One question that I can't seem to find an answer to is: What happens to a super long fixed-term tenant post foreclosure if a new owner wants them out (legally of course)?

Let's look at worst possible case.

I purchase a foreclosure, knock on the door. Occupied tenant opens the door, tells me that he/she has a fixed-term lease agreement that will end in 15 years, which was signed by a previous landlord (who is now foreclosed).

My goal is for the tenant to move out asap, so I can reno the property and sell.

Month to month term is pretty easy, you give the tenant legal notice by the book. However with fixed term tenants I have to wait for the lease term to end before I can have a vacant property, in my example it's 15 years (woah!!) Tenant never missed a payment, property not damaged etc.. in other words, no legal grounds to file for eviction and can't do "Notice for Termination With Cause".

Did I just purchased myself a 15 year headache and SOOL? 

I am basing my understanding on federal law that does not remove current lease terms after foreclosure, in order to protect the tenant. 

PS: I understand that I can still collect rent from the tenant, but my goal is to flip not rent.   

Hi @Dima Novikov and congrats on your first BiggerPockets post!

First, let me say I'm not a lawyer, so in your hypothetical example your first call after talking to the tenant should be to an experienced landlord-tenant attorney in Georgia.

Here's a great summary of the federal Protecting Tenants at Foreclosure Act of 2009 (PTFA), to which you are referring.

That all said, there are a few reasons this worst-case scenario is not worth too much worry:

  • No (sane) landlord is ever going to give an arm's-length tenant a 15-year lease for a fixed rent amount, and if they aren't arm's-length then PTFA doesn't require you to recognize that 15-year term.
  • PTFA has a provision that the rent cannot be substantially less than fair market rent, and odds are good that won't be the case.
  • I've never met a tenant who couldn't be persuaded to leave with financial incentives. Offer to pay them to get out and once they are you can begin your renovations.