Big Change to Virginia Landlord and Tenant Law

On July 1, 2017, a new law takes effect that represents a big change to Virginia landlord and tenant law. The law specifically affects tenants with landlords in foreclosure. Now leases terminate upon foreclosure. This is a big change and will affect many renters in Virginia.Change to Virginia Landlord and Tenant Law -- Lee Legal -- Foreclosure Attorney in VA MD DC

I have written (Does Foreclosure Terminate a Lease?) on this topic previously. Before the change, Virginia followed the federal Protecting Tenants at Foreclosure Act. Specifically, Virginia Code § 55-225.10 required landlords to provide tenants written notice of mortgage default or notice of foreclosure. And prior to the new law, if your lease was ending within 90 days, you could automatically stay through the end of your lease. After that time period, the foreclosure purchaser could move to evict you. Good times.

New, Big Change to Virginia Landlord and Tenant Law

As of July 1, 2017, however, leases automatically terminate at the time of foreclosure. This new, big change to the law means that many renters will be facing eviction (in Virginia, “unlawful detainer”) even if they have paid their rent every month and on time. Inevitably, some renters will not even know a property is in foreclosure prior to a sale. And uncertainty for renters will make it more difficult and more expensive to transact privately in the landlord-tenant market.

Under the new law, tenants can stay in the property month-to-month until the foreclosure purchaser (usually the bank) terminates the least. The original lease rate determines the amount of rent. After 30 days’ written notice post-foreclosure, however, the tenant may be evicted. Landlords can now simply terminate any existing lease with 30 days’ notice, regardless of the length of the lease term. A new Virginia Code § 55-225.10(D) reinforces the tenant’s duty to continue paying rent, even if the tenant doesn’t know to whom to pay the rent. Just set the money aside until you know who your new landlord is.

This represents a big change to Virginia landlord and tenant law and a big win for banks and foreclosure purchasers. But the new law is a big blow to Virginia tenants. Foreclosure purchasers (usually banks) can now simply terminate a written contract (the lease) and with just a simple 30-days notice. More Virginia tenants will be facing unlawful detainer actions as the result of choosing the wrong landlord and through no fault of their own.

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