What happens to a tenant lease after foreclosure?

Published by Michael FrankeDrafted with AI; every statement checked against its source on November 13, 2026

After foreclosure, a bona fide tenant's lease usually does not vanish right away. Federal law generally gives the tenant at least 90 days' notice to vacate, and a fixed lease may last until its term ends. If the foreclosure buyer plans to live in the home, the tenant may have only the 90 day protection. State and local tenant laws can add more time, court process rules, and limits on lockouts or utility shutoffs.

Key facts

The PTFA gives a bona fide tenant at least 90 days' notice before the notice to vacate takes effect.
A bona fide lease entered before the notice of foreclosure can let the tenant stay until the end of the remaining lease term.
If the new owner plans to live in the property, Georgia's court tenant resource says the tenant has the right to remain for 90 days.
State or local law can give longer time periods or other added tenant protections.
HUD says these duties are not limited to FHA insured or HUD assisted housing.

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The federal baseline after a foreclosure sale

The Protecting Tenants at Foreclosure Act, often called the PTFA, is the national starting point after a residential foreclosure. Under 12 U.S.C. § 5220, the successor in interest must give any bona fide tenant a notice to vacate at least 90 days before the effective date of that notice.

A fixed lease can also survive the foreclosure sale. HUD says successors take their interest subject to the remaining term of any bona fide lease, and HUD says these duties are not limited to FHA insured or HUD assisted housing.

The Federal Reserve says the restored PTFA does not include an expiration date. The federal statute also says state or local law can give longer time periods or other additional protections.

Which tenants and leases are covered

The PTFA does not protect every person living in the property. The federal statute says the lease or tenancy must be the result of an arms length transaction, and it says the borrower, the borrower's child, spouse, or parent cannot be the tenant.

The Federal Reserve says the PTFA does not cover tenants in a non foreclosed property, tenants with a fraudulent lease, tenants who enter lease agreements after a foreclosure sale, or homeowners in foreclosure. Plain English: the law is aimed at real tenants, not the former owner using a lease to stay in the home.

If the lease is oral, unusual, subsidized, or tied to a family arrangement, the safer path is to use court or legal aid resources in the state where the property sits. The CFPB says state and local laws may offer protections for renters in the foreclosure process.

Fixed lease, no lease, and buyer move in situations

If the tenant has a bona fide lease entered before the notice of foreclosure, the federal statute lets the tenant occupy the premises until the end of the remaining lease term. A tenant without a lease, or with a lease terminable at will under state law, is still covered by the 90 day federal notice rule.

Georgia's court tenant resource summarizes the PTFA this way: the tenant can stay for at least 90 days or for the rest of the lease, whichever is greater. The same resource says that if the new owner plans to live in the property, the tenant only has the right to remain for 90 days.

The federal statute also defines the date of a notice of foreclosure as the date complete title transfers to a successor entity or person. So the PTFA timing turns on the transfer of title to the new owner after foreclosure.

Fixed lease: usually honored through the remaining lease term.
No lease or at will lease: covered by the 90 day notice rule.
Buyer will live there: the 90 day protection may be the limit.

A notice to vacate is not a lockout

A notice to vacate after foreclosure is not the same thing as physical removal. The Indiana court manual defines eviction as the legal process of removing someone from real property, and it says actual eviction with sheriff participation requires a prior court order.

State resources also warn against informal removal. Indiana's court manual says illegal lockouts or utility shutoffs could result in punitive damages.

The CFPB also warns about proof of ownership and scams after foreclosure. It says tenants should ask for documents if someone claims to be the new property owner, and it says scammers may review foreclosure recordings and falsely demand rent from tenants living in foreclosed properties.

This page is not a step by step plan for removing a specific tenant. For a specific lease, notice, or court filing, use the court and legal aid resources for the state and county where the rental is located.

State law can add tenant protections

Federal PTFA rules set a national floor. They do not wipe out state law, local law, public housing rules, or subsidized housing rules that give more protection.

The examples below show why the answer can change by state. They are public resources, not a complete ruling for any one tenant.

State resource	What it says
Indiana	The Indiana court manual says actual eviction with sheriff participation requires a prior court order, and illegal lockouts or utility shutoffs could result in punitive damages.
Ohio	Ohio Legal Help says that if a landlord sells the property to a new owner, the original lease carries over to the new owner. It also says a month to month landlord usually has to give notice at least 30 days before the lease ends.
Georgia	Georgia's court tenant resource says eviction is a dispossessory proceeding and that a tenant has the right to be evicted only if the landlord files a proper court action. It also summarizes PTFA as at least 90 days or the rest of the lease, with a 90 day limit if the new owner plans to live there.

Selling a rental before the foreclosure sale

Before a foreclosure sale is complete, the owner may still be looking at sale options. See can you sell a house in foreclosure for the sale side of that question.

A tenant lease issue does not disappear just because the property is listed or sold. For ordinary sales outside foreclosure, Ohio Legal Help says the original lease carries over if the landlord sells the property to a new owner.

Selling to a cash buyer is one option for an owner who wants to sell a rental with tenants in place. It does not erase federal or state tenant protections. For tenant sale issues, see how to sell a house with tenants, and for former owner move out issues, see how long after foreclosure do I have to move.

Frequently asked questions

Does foreclosure automatically cancel a tenant's lease?

No. A bona fide fixed lease entered before the notice of foreclosure can let the tenant stay until the remaining term ends. The main exception is when the new owner plans to live in the property, where the tenant may have only the 90 day protection.

Who has to give the 90 days' notice after foreclosure?

HUD says responsibility for the advance notice falls on the immediate successor in interest of the property. In plain terms, that points to the new owner or successor after foreclosure, not the old landlord after title has transferred.

What happens if the tenant is month to month?

The federal statute says a tenant without a lease, or with a lease terminable at will under state law, is still subject to the 90 day notice rule after foreclosure. Some state resources also discuss ordinary month to month notice rules, such as Indiana and Ohio resources that describe 30 day notice rules.

Can the new owner change the locks after foreclosure?

State resources warn against that type of informal removal. Indiana's court manual says illegal lockouts or utility shutoffs could result in punitive damages.

Does the PTFA protect the former homeowner?

No. The Federal Reserve says the PTFA does not cover homeowners in foreclosure.

What if the rental is in Georgia?

Georgia's court tenant resource says the PTFA lets a covered tenant stay at least 90 days or for the rest of the lease, whichever is greater. If the new owner plans to live in the property, the same resource says the tenant has the right to remain for 90 days.

What if the tenant has subsidized housing?

The federal statute says the PTFA does not affect requirements for termination of a federal or state subsidized tenancy. It also says state or local law can give longer time periods or other additional protections. HUD says PTFA duties are not limited to FHA insured or HUD assisted housing.

Sources

Checked against each source on November 13, 2026. This page is general information, not legal or tax advice.

12 U.S.C. § 5220 (Office of the Law Revision Counsel, U.S. House of Representatives)
CA 18-4: Restoration of the Protecting Tenants at Foreclosure Act (Board of Governors of the Federal Reserve System)
What should I do if the house or apartment I'm renting goes into foreclosure? (Consumer Financial Protection Bureau)
Protecting Tenants at Foreclosure: Notice of Responsibilities (U.S. Department of Housing and Urban Development)
Small Claims Manual (2026) (Indiana Office of Court Services)
Month-to-month leases in Ohio (Ohio Legal Help)
Landlord/Tenant (Judicial Council of Georgia Administrative Office of the Courts)