Thousands of tenants facing eviction due to foreclosures must be given written notice of the impending auction and more time to find a new home under new laws.

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The stuffed animals still lie on beds. The dresses still hang in the closets. And a “Keep Out” sign on the older girl’s bedroom door remains defiant.

Moving again just isn’t something Andrea Utley and her daughters, Isabella, 9, and Alivia, 7 want to think about right now — even though the bank that foreclosed on the house they are renting wants them out by the end of the month.

“Finally for the first time in their lives they have their own bedrooms,” said Utley, 37. “It’s a huge bummer. They don’t want to go at all.”

Thousands of tenants across Washington state are caught in a lurch through no fault of their own when their landlords lose their rental homes after defaulting on their mortgages.

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The number of foreclosures on all types of houses in the state is up nearly 50 percent from a year ago and rising, driven by unemployment and a weak housing market. One national group estimates that 40 percent of foreclosed homes were occupied by renters.

Both federal and state lawmakers enacted new tenant protections this year in response to the growing number of foreclosures involving rental property but attorneys are scrambling to reconcile differences between that law, which went into effect May 20, and a new state law that goes on the books July 26.

Tenant advocates say they fear inconsistencies — even contradictions — will make it hard for attorneys to advise their clients, and hard for renters of foreclosured homes to understand their rights.

Perhaps the thorniest question is whether a tenant who doesn’t sign a lease with the new owner should continue paying rent, because they seldom get their security deposit back from the old landlord.

The federal law requires these tenants to keep paying rent for as long as they occupy the property, which can be 90 days from the sale or the remainder of their old lease, whichever period is longer.

State law differs

The new state law, though, doesn’t require such tenants to pay rent to the new owner. However, the law doesn’t require the new owner to honor the old lease and tenants must move out within 60 days of being notified.

The state’s largest association of landlords didn’t oppose the new law.

In general, federal law trumps state law in setting a minimum standard of protection, attorneys say. In cases where the laws conflict, the provision that affords tenants with greater protection should apply, experts say.

“Given the number of foreclosures in our state and the number of tenants living in them, it’s going to be confusing,” said Bruce Neas, an attorney for Columbia Legal Services, a nonprofit law firm that represents the poor in Washington state.

Last November, Utley signed a $2,000-per-month lease for a five-bedroom house in Ballard that she intended to share with another family.

The four-month lease was short because the landlord planned to sell the Tudor-style house in the spring.

“She told me she would consider lease-to-buy,” Utley recalls.

The spacious house was a refuge for Utley and her daughters after a tough year: She had recently gotten a divorce, left Montana and returned to Seattle.

She brought with her a hot-dog stand, Wandering Wieners, her main source of income.

But a few days before Christmas, Utley said she came home to find a notice from the bank: Her landlord apparently had defaulted on the mortgage weeks before Utley signed her lease.

Her landlord assured her the problem with the bank would be resolved, Utley said.

Foreclosure auction

She said she stopped paying rent after February, when a trustee filed notice that the house would be auctioned to pay off the owner’s mortgage.

The bank took over the property in May and later filed for eviction.

Utley said she feels bad for her daughters. Alivia tends to be quiet and Isabella is “a little partyer,” Utley said.

“Bella sings way too much. She kind of annoys me,” said Alivia, who likes having some privacy. “When I saw my room for the first time, I said I never want to move out.”

Tenant counselors say that in the past six months they’ve seen an alarming increase in cases of renters who signed leases with landlords who already had defaulted on their mortgages.

Section 8 included

Finding a new rental is especially hard for tenants who are poor and receive vouchers for housing through the federal Section 8 program because of the tight supply of this type of housing. The federal law offers those tenants the same protections.

Lisa Hampton, 39, is a Section 8 recipient who lives with her three kids and two Chihuahuas in a foreclosed property in Tacoma, which has more home foreclosures than any city in the state.

Hampton, who is disabled, said she was served last month with an eviction lawsuit that ordered her to vacate within 20 days.

That shouldn’t be happening under the new federal law, said Columbia Legal Services attorney Neas. “One of our fears is the courts have no idea this (law) happened,” he said.

The Tacoma house is the fourth rental Hampton has lived in in seven years and the second one to be foreclosed on.

So far, she hasn’t be able to get her $1,200 security deposit back from her original landlord.

At the very least, tenants will have more warning than before.

The new state law requires trustees who foreclose on a property to give tenants at least 90 days’ notice before the sale and of their options. Although trustees do post notices on the property, now they will be required to mail a notice addressed to the property’s residents.

Despite the confusing legal discrepancies, the new state and federal laws offer “crucial relief” for renters worried about being displaced by a foreclosure, said Emily Paddison, a counselor for Solid Ground, a nonprofit Seattle social services agency.

Even before the new laws passed, Fannie Mae and Freddie Mac, two federal agencies that hold many of the nation’s home mortgages, had declared moratoriums on foreclosures and evictions of renters in foreclosed properties.

Historically, tenants in foreclosed properties in Washington state had just 20 days after the sale to move out — though in practice many move in a few days out of fear.

Moreover, tenants weren’t entitled to any notice before the new owner filed a lawsuit to evict them.

“Once you have an eviction on your record, it’s incredibly hard to find good housing because the (next) landlord can legally discriminate against you,” Paddison said.

Eviction orders

Still, the King County Sheriff’s Office says only a tiny fraction of the more than 1,500 eviction orders it has received this year apply to foreclosed properties. Rarely does a sheriff’s deputy have to visit the property and remove the tenants, said sheriff’s spokesman John Urquhart.

Nevertheless, moving again stresses families whose resources already are stretched.

They have to find a new home within their budget, figure out where they’ll send their children to school and tap savings for moving expenses.

Utley says she hasn’t gotten her security deposit back from her original landlord. She’s borrowing a friend’s truck to transport her hot-dog stand.

And she’s worried she may lose her main source of income because the health department recently sent her a two-page list of deficiencies with her hot-dog stand.

The girls will go back to Montana to live with her parents, Utley said, while she looks for a new rental.

“I’m not going to go couch surfing with my kids,” she said.

Sanjay Bhatt: 206-464-3103 or

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