There are a lot of risks involved with buying a property that has been foreclosed. Certainly, buying a foreclosed property can be profitable, and some good deals can be had. But often, pitfalls happen that a buyer may not foresee. One of those pitfalls is buying property, only to find that there is a tenant living in the property.

How Do You Know?

You may think that if you buy property at foreclosure, you would already know if there was a tenant in the property or not. That is not always the case. Certainly, you could ask the owner, or visit the property, to check if there is a tenant, but absent that, you may not know if the foreclosed property has a tenant inside of it.

That is because although a tenant in foreclosure is required to be served with the foreclosure lawsuit, and named in the foreclosure suit, they sometimes are overlooked by foreclosing Plaintiffs. That means that if you (or your real estate or title attorney) just look at the public or court record, you may not know if there is a tenant in the property or not.

Can You Get Rid of the Tenant?

Whether the tenant is named in the foreclosure or not, a foreclosure does not, under New Jersey law, terminate the tenant or give you, as the new owner or purchaser of the foreclosed property, the right to evict the tenant.

It does not matter if you buy the property at foreclosure, or if you buy the property from a  lender who took repossession of the property after a foreclosure; you must respect and honor the tenant’s lease.

You also cannot evict the tenant, even if there is no written lease.

However, if you are intending to live in the purchased property, you are permitted to give a tenant 90 days notice of intent to terminate the lease and vacate the property (if the lease would normally extend beyond 90 days).

As the new owner or buyer of the property, you must inform the tenant within 10 days after the sale of where to send future rent payments and what their rights are under New Jersey law.

You are allowed to offer money to a tenant to voluntarily vacate the property, but it is illegal to threaten or use any language intended to induce a tenant to vacate the property.

Good and Bad News

The good news is that if your purchased property does have a tenant in it, you may have an immediate income stream, and guaranteed rental money, which can provide some extra income to you.

But for buyers who do not want to become instant landlords, or who do not understand the legalities involved, this could be a tricky situation. You may need legal help understanding your rights as a landlord. Additionally, if the tenant is not paying or has not paid rent, you as the new owner will have the cost and expense of eviction proceedings to get rid of the tenant.

Contact our New Jersey real estate attorneys at The Law Office of Agnes Rybar LLC today if you have questions about your rights when you buy property in foreclosure or that may have tenant problems.




Main Office
One Hadley Avenue
Toms River, NJ 08753
Phone: 732-286-7763
Fax: 732-228-6314
Map & Directions

By Appointment Only
335 Evesham Ave
Lawnside, NJ 08045
(Camden County; also near Burlington Cnty)
Map & Directions

Connect With Us On Social Media

The Law Office of Agnes Rybar, LLC, in Toms River, New Jersey, serves clients throughout Ocean County, Monmouth County and elsewhere in South Jersey and along the Jersey Shore, including many in Forked River, Brick and Lakewood.

© 2018 by Agnes Rybar. All rights reserved. Disclaimer | Site Map | Privacy Policy | Website Design & Development by Attorney Site Solutions.