Arkansas Foreclosure Tenant Rights

Foreclosure Process

• Though Arkansas allows lenders to pursue either a judicial or non-judicial foreclosure, there is no real difference as far as the tenant is concerned. If the tenant is also borrower, neither the lender nor new owner who purchases the property at auction can make a move to evict until the property has legally changed hands. The situation is slightly different in the case of a third party tenant. Unless otherwise stated in the lease, a 30-day notice of termination must be given.
  
  

Eviction

• If a borrower is collecting money from a lawful tenant, he has no real reason to evict him during foreclosure, but everything changes when a new owner purchases the property at auction. At that point, an eviction can go a few different ways. If the owner wishes to evict the previous owner, he can issue a 3-day Notice to Vacate. If the tenant chooses to ignore this, the new owner can file an Unlawful Detainer in court after the three days has passed. If granted, the sheriff will arrive shortly and physically remove the tenant from the premises.
  
  

Renter

• If a property sold at foreclosure has a legal renter in it at the time, a different procedure applies. Assuming that the tenant occupies the dwelling under the terms of a legal agreement, the new owner does not have the option of serving a 3-day Notice to Vacate. His choices are to let the tenant continue to reside there and collect rent, or to terminate the lease with a 30-day notice. The state of Arkansas allows for this action if there is no other time limit mentioned in the agreement.
  
  

Considerations

• Whether a borrower or renter, any tenant should be mindful that he can be forcibly evicted from the house as long as the landlord follows the regulations enacted by the state relating to legal noticing and observation of time limits. Once the property has been bought at foreclosure and paid for, it is legally under the control of a new owner and the former borrower relinquishes all claim. No matter how much a tenant might want to stay in a particular dwelling, if the owner wants him gone, it will eventually happen.