Help! My Rental Home is in Foreclosure!

Rent home foreclosure

You are renting a home that has just been foreclosed upon.  What can you do?

Bona fide tenants who rent a home that goes into foreclosure are protected by a federal law called “Protecting Tenants at Foreclosure Act” (PTFA).  The PTFA* was enacted in 2009 and extended through 2014.  What does this mean for you? 

*Please see important update regarding PTFA, below.

Are you a “bona fide tenant”?

To be considered a bona fide tenant, you:

  • CANNOT be the borrower or the borrower’s spouse, child, or parent; and
  • must have a lease that arises from an “arms-length transaction” (which means a legal contract not meant to evade the law); and
  • pay rent that is close to the fair market rental value unless the rent is reduced or subsidized pursuant to a federal, state, or local subsidy program (example: Section 8 Housing).

What protections are offered for bona fide tenants?

At least 90 days notice

The new owner of the property after the foreclosure sale, even if it is a bank, must give a bona fide tenant at least 90-days written notice before the effective date of any notice to vacate.

Even if you are a month-to-month tenant, the new owner MUST give you 90-days notice to move. Under Arkansas law, a month-to-month tenant can be terminated with 30-days written notice. However, if you are a month-to-month tenant in a home that is foreclosed upon, the PTFA* gives you 90 days to move. NOTE: This protection expired on December 31, 2014 – and is no longer available to tenants in Arkansas!

Full term of lease, if lease entered into prior to notice of foreclosure.

Bona fide tenants who have entered into a lease prior to the notice of foreclosure have the right to stay in the residence until the end of the lease term unless the purchaser will occupy the home as the purchaser’s primary residence.

How can you protect your rights as a bona fide tenant?


  1. You must continue paying rent to the original landlord as long as they are still the rightful owner of the property.
  2. You should be notified when the home is actually sold. This notification should give you the name and address of the new owner. Contact the new owner.
  3. If a bank purchases the home in foreclosure, they are your new landlord.  You may need to contact them multiple times to determine where and to whom you should pay your rent.
  4. Make sure you set your rent money aside if you are unsure who to pay.  You will be responsible for any payments missed during the foreclosure process.

We Can Help

*Important Update for 2015: The Protecting Tenants at Foreclosure Act of 2009 (PTFA), which originally became effective on May 20, 2009, expired on December 31, 2014.  This protection is no longer in place for renters in Arkansas.

IF YOU NEED HELP: If you need assistance with your Landlord-tenant legal matter in Arkansas, please contact Deborah at The Hardin Law Firm, PLC.  For our out-of-state clients with Arkansas properties, we are available via phone, fax, and email, to assist you with your real estate needs.

ATTORNEY: Learn more about Our Attorneys and Staff.

SERVING: Cabot, Beebe, Ward, Searcy, Jacksonville, Lonoke County, White County, Faulkner County, and other central Arkansas areas. We also routinely serve out-of-state clients, who require representation in Arkansas.

DISCLAIMER: The information contained in this web site is intended to convey general information. It should not be construed as legal advice or opinion. It is not an offer to represent you, nor is it intended to create an attorney-client relationship.