1. Tenant Rights During Foreclosure
Workshop for Tenants
Marc Potvin & Myrta Cupeles February 17, 2009
Neighborhood Legal Services
170 Common St., Lawrence MA
(978)

2. What is the foreclosure problem?
Foreclosures are exploding
Tenants are living in bad housing because owners not taking care of properties
New owners want properties empty
New owners using “cash-for-keys” inducements and eviction threats to pressure tenants to move out
Forced moves are stressful to families
Vacant properties are bad for neighborhoods

3. What is a “foreclosure”?
Legal process for a lender to take ownership after a borrower stops paying a loan (mortgage)
Four Steps
Step 1 - Give notice to owner
Step 2 - File Complaint in Land or Superior Court
Step 3 - Hold a foreclosure auction
Step 4 - File a foreclosure deed at the Registry of Deeds

4. Basic Legal Rights: Your Tenancy Survives a Foreclosure
Foreclosure does not automatically end any tenancy
Tenants do not have to move just because the landlord lost the property in foreclosure
Tenancies at wills (no lease / month-to-month) continue on same terms as before
Leased tenancies convert to tenancies at will
It is illegal for the new owner to treat tenants as trespassers, do a lock-out, or shut-off utilities

5. Basic Facts for Tenants:
The bank, person or company that purchases at the foreclosure auction becomes the new owner and landlord with full responsibility for repairs
If the new owner or its agent tells a tenant that they must move, the tenant does not have to
Only a judge can evict a tenant; self-help evictions and lock-outs are illegal
It is usually best to stay unless a tenant already wants to leave and has a good place to go to

6. Don’t Be Tricked by Cash-For-Keys
Cash-for-keys offers ($500 – 30 days) are a cheap scam to pressure tenants into moving fast
Cash-for-keys offers are almost never a good deal
The cash won’t cover moving or security deposit
Tenants must sign away their legal rights: return of security deposit, damages for utility shut-offs, bad conditions, etc.
Tenants usually do much better in court, both in money and time

7. What If You Sign & Change Your Mind?
If you sign a cash-for-keys agreement and you change your mind because the situation changes, or you cannot or do not want to move, you don’t have to move
You likely will not get paid and you probably gave up legal claims
But the new owner must still go to court to evict you, and you can still raise defenses and ask for more time

8. Facts for Subsidized Tenants (Section 8, MRVP, etc.):
Tenancy continues after foreclosure
During first 12 months of a tenancy the new owner can evict only “for cause”: tenant must violate the lease
After 12 months a new owner can terminate only for “good cause,” which may include “business or economic” reasons
Owner must prove that vacant unit is a good business or economic reason

9. Should You Pay Your Rent During a Foreclosure?
Tenants are responsible for paying rent
Always get receipts
Until a foreclosure sale, tenants should continue paying rent to the old landlord
If you cannot locate the old landlord, hold the rent & put it in a separate bank account, if possible
Tenants should stop paying rent to the old landlord when there is a foreclosure sale
A new owner has the right to collect rent

10. Should You Pay Your Rent During a Foreclosure?
Beware of the old landlord attempting to collect the rent. If in doubt, hold rent and put it in a separate bank account, if possible
Keep receipts to prove payment
If new owner did not give notice and later claims rent due, tenant can defend & force new owner to sue old owner for rent actually paid to the old owner

11. What if the new owner refuses rent?
New owner may refuse rent or won’t request it
Questionable technique to avoid admitting tenancy
Good technique to cause you to fall behind in rent
If rent is refused, send a certified letter to new owner offering to pay rent & asking to whom you should pay
Keep copy!
Save rent money, and put it in a separate bank account, if possible

12. Tenants in Condos
Condo fees are the responsibility of the owner, not the tenant
If the owner fails to pay the condo fee, the condo association is legally permitted to demand and collect rent from the tenant until the balance owed is paid off
Keep condo demand letters
Get and keep receipts for all payments to association

13. Right to Utilities After Foreclosure
Utilities covered: water, sewer, electric, gas, heat
If tenant had a lease: a new owner steps into the shoes of the old owner
If tenant at will: new owner must pay for all utilities, except those that the tenant agreed to pay under a written agreement with the old landlord
Problem: foreclosing entities often ignore utilities for which they are responsible. This lead to shut offs

14. Dealing with Utility Shut-Offs
Contact new owner immediately & demand action to prevent shut-off or restore service
Contact utility company & request service be restored or not be terminated due to the foreclosure. Tell utility that landlord lost property in foreclosure
Many utilities will not shut-off when informed of foreclosure status
Don’t have utilities put in your name; only the owners
If problem remains, call Dept. of Telecommunications & Energy (DTE) Consumer Hotline
DET staff can and do order utilities to restore service
If these fail, go to Housing Court for a Temporary Restraining Order (TRO) to order new owner to pay the utility bills and provide service

15. What if you are living in bad conditions?
Owners are responsible for making repairs to an apartment and common areas, including snow removal
All housing must meet the standards of the State Sanitary Code
Tenants should always notify an owner of problems
Retaliation against the law – penalty is 3 times monthly rent
In eviction case, presumption of retaliation within 6 months of complaint or request for code inspection
Notice also can go to RE agent, prop. manager or lawyer
If pre-foreclosure, notify current landlord; if post-foreclosure, notify new owner
Notify in writing. Keep a copy
This is proof that the tenant notified the owner and owner knows about problems

16. If Bad Conditions Continue
If bad conditions continue ask for an inspection by Inspectional Services Department at City Hall
(978) in Lawrence
Tenants can request a full inspection of apartment and all common areas (hallways, laundry rooms, basement, outside)
ISD will give tenant a report of code violations and will order owner to make repairs
ISD should re-inspect and may take the owner to court
Tenants should clean up before inspection to avoid citation
Take pictures and write date on back

17. How do I get repairs made?
First complain to the owner in writing
If no response, call ISD for an inspection
If serious or emergency conditions, get ISD report and go to Housing Court for a Temporary Restraining Order (TRO)
TRO will order owner to make immediate repairs
TRO can be brought against prop. manager or R.E. agent if owner not known

18. Evictions After a Foreclosure
If new owner cannot persuade tenant to leave, the only option is to begin the formal eviction process
To evict an owner must follow specific legal procedures:
Give tenant a valid “notice to quit”
File a complaint in court
Prove case and overcome tenant defenses

19. Evictions in a Nutshell
Notice to Quit
Court Summons & Complaint
Tenant Answer
Tenant Options
Discovery
Transfer to Housing Court
Court Hearing
Mediation
Judgment or Dismissal
Obtaining a 6-12 month Stay

20. Eviction Step #1 - Notice to Quit
Before a landlord can evict, the tenant must be given a written notice of tenancy termination (called a “notice to quit”)
Often uses phrases such as “tenant must deliver up” or “vacate” the apartment
Notice will state a date for the tenant to move
You do not have to move by the date!
A notice to quit does not determine who is entitled to have legal possession of an apartment
Only a judge can decide

21. Help is Available to Tenants
Don’t panic if you get a Notice to Quit or Summons and Complaint
If you receive a Summons and Complaint come to a NLS Foreclosure Eviction Clinic
Get advice
Get help with completing your Answer and Discovery forms
Remember – you are likely to do better at court

22. Eviction Step #2 – Court Complaint
Landlord can go to court only after the notice period is over
Legal filing called a “Summons and Complaint”
Complaint must state the reason for the eviction
Complaint can be brought by owner or agent
Must be served by a constable or sheriff
Will state “Answer Date” and “Original Trial Date”
Answer Date will be about 7-14 days after service
Original Trial Date in Lawrence is the Thursday after the Answer Date

23. Step #3 – Tenant files “Answer”
The Answer is the document you file to tell your side of the case
It will include your Defenses
May include Counterclaims against the owner
Easy-to use Answer forms are available from:
Neighborhood Legal Services or
On-line at
The Answer must be delivered to the court and the landlord (or landlord’s attorney) by the Answer Date shown on the Complaint

24. Major Foreclosure Eviction Defenses
Technical Defenses
No notice to quit or defective notice to quit
Does not end tenancy on a rent day
Does not give a full rental period
Unclear or misleading language
Owner files complaint before notice to quit expired
Complaint not signed by an attorney (if corporate landlord)
Owner can’t prove ownership (no foreclosure deed)
Complaint is defective or not served
All tenants not named
Reason is different from notice to quit

25. Major Foreclosure Eviction Defenses
Bad conditions
Interference with utilities or use of the home (Breach of Quiet Enjoyment)
Security Deposit & Last Month Rent Violations
Retaliation - for complaint of bad conditions
Discrimination (i.e. Section 8, familial status)

26. Why Use Tenant Discovery
Great tool to get information to prepare your case
If tenant requests Discovery by the Answer date, the trial date is automatically postponed for 2 weeks
3 types of Discovery
Interrogatories (Questions) – up to 30 allowed
Requests for Documents
Requests for Admissions – owner must admit or deny facts
Easy-to-use discovery forms are available from NLS or at

27. Transfer from District Court to Housing Court
If eviction is filed in the District Court you can transfer the case to the Northeast Housing Court
Strongly recommended
More knowledgeable judges and housing specialists
Usually postpones trial date
How? File a “Transfer Form” with District and Housing Court before the Trial Date
Form available at NLS or at

28. Understanding Security Deposits
Foreclosure does not terminate security deposits
Mass. law requires old landlord to transfer deposit to new owner at time of sale (rarely done in foreclosures)
Tenants can recover deposits from:
Old landlord (can be a problem because insolvent or gone), or
New owner, unless new owner is the foreclosing entity and a bank charted by Mass. or the U.S.
Best to bring as counterclaim against new owner because it can serve as an eviction defense
On anniversary date a landlord is required to pay the interest to the tenant or inform the tenant to deduct the amount from the next rent payment
If you already moved, send a 30-day demand letter and follow with Small Claims lawsuit
Under G.L. ch. 93A, tenants can win triple damages in a small claims action

29. Tenant Counterclaims Claims brought against owner for money damages
Use to pressure bank into giving a lease or more money and more time for a move out
Bad Conditions (rent rebate)
Breach of Quiet Enjoyment (no heat, no utilities, lock-out, unlawful entry, bad conditions) (3 X Rent)

30. Tenant Counterclaims
Unfair or Deceptive Practices (Consumer Protection Violations – scare tactics)
Infliction of Emotional Distress
Headaches, stomachaches, insomnia)
Retaliation (3 X Rent)
Security Deposit Violation

31. Eviction Step #5 – Court Hearing
Thursdays is eviction day at Housing Court
NLS staffs a “Lawyer-for-the-Day” table
Services range from advice, assist in mediation, to full representation at trial
Case referred to a Housing Specialist for mediation
Banks agreeing to tenancies or better move out deals when faced with worse care scenarios
Tenant has good defenses – likely to keep possession
Tenant will win $$$$$ damages
If no agreement reached, case goes before judge

32. Even if you lose your case . . . You still get time
Tenants are entitled to seek 6 months time to find a new place to live
Called a “stay” of the execution
If tenant is elderly or disabled, stay can extend to 12 months

33. Final Words Almost never take a “cash-for-keys” offer
Write to the owner about bad conditions
Ask for a ISD inspection
Use court process to obtain more money, more time or keep their apartment
Attend a NLS Eviction Clinic
NLS can assist you to file your Answer and prepare for court
Tenants will almost always do better at court

34. Questions and Answers