Long Island, NY Foreclosure: What are the tenant's rights in a New York foreclosure?

This issue comes up often. When a tenant is served in NY, the tenant is uncertain if s/he should continue paying the rent to the landlord who is in foreclosure. Generally, the tenant is still legally obligated to pay the rent to the landlord. It is important to know if when the landlord gave the mortgage to the original bank if s/he executed an assignment of rents over to the bank. If s/he did, then the bank may have the right to collect the rents. If the bank wants to enforce the assignment, it likely will then seek to have the court appoint a receiver to collect the rents; however, this is unlikely if the property is a single-family home.  Generally, once served, a tenant can hold back rent, but the landlord can bring an eviction proceeding based on non-payment. If so, the tenant will need to be prepared to deposit the back rent into the court or directly to the landlord.  If the property is eventually sold at a foreclosure auction, the landlord would likely lose all ownership rights in the property and would no longer be entitled to the rent. In this situation, the tenant's lease will survive until the end of the lease period and rent will be paid to the new owner of the property.  Generally speaking, if the tenant was a month to month tenant then s/he would have 90 days to relocate. Assuming the tenancy was for a term other than month to month, it could be terminated if the new owner wants to move into the property and the new owner would need to terminate the tenancy with a required 90 day notice. For more information see the following site:

http://www.occ.gov/publications/publications-by-type/comptrollers-handbook/ptfa.pdf