Post-Sale Eviction
& Occupancy

The federal floor: PTFA

The Protecting Tenants at Foreclosure Act (PTFA) is the federal statute that governs what happens to tenants when the property they rent is foreclosed. Originally enacted in 2009 as temporary law, it lapsed in 2014, and was permanently reinstated by the Economic Growth, Regulatory Relief, and Consumer Protection Act in 2018.

PTFA applies nationwide to all federally related mortgage loans (which is effectively all mortgages) and establishes two core protections for tenants in a foreclosed property:

1. A bona fide tenant with an existing lease can remain in the property through the end of the lease term, with limited exceptions
2. A month-to-month tenant or a lease-holding tenant whose lease terminates because the new owner will occupy the property gets at least 90 days’ written notice before eviction proceedings can begin

A “bona fide” tenancy requires three things under PTFA: (a) the tenant is not the former owner or a close relative of the former owner, (b) the lease was the result of an arms-length transaction, and (c) the rent is at or substantially near fair market value (or subsidized — Section 8 tenants are protected).

PTFA is a federal floor. State law can — and in several states does — provide greater tenant protections. PTFA does not preempt stronger state law.

Who’s in the property?

The occupant category drives everything. Four common scenarios, each with different mechanics:

• Former owner in possession. The prior owner, still living in the house. Not protected by PTFA (PTFA excludes the former owner). Eviction proceeds under state post-foreclosure procedure. Usually the simplest case procedurally — but often emotionally complicated.
• Bona fide tenant. A renter with a real lease who was there before the foreclosure filing. PTFA protected. Cannot be evicted just because the property changed hands. The new owner inherits the lease through its end, or must serve a 90-day notice first if certain conditions apply.
• Sham tenant. A person (often a family member or associate of the former owner) claiming to be a tenant under a lease signed just before or after the foreclosure. Not PTFA protected — these fail the arms-length requirement. But proving sham status takes time and evidence.
• Squatter. Unauthorized occupant with no lease and no ownership history. Not PTFA protected. Eviction proceeds as an ejectment action under state law, which in some jurisdictions still takes 45–90 days.

Judicial states: writ of possession

In judicial foreclosure states, the path to possession goes through the same court that entered the judgment. After the certificate of title issues, the new owner files a motion for writ of possession. The court issues the writ to the sheriff or clerk, who serves the occupants and enforces the removal if they don’t leave voluntarily.

Typical timeline once the certificate of title is in hand:

• Florida — writ of possession issued on motion, typically 5–15 days to get the writ, another 7–10 days for the sheriff to post the 24-hour notice and enforce. Roughly 3–4 weeks total for a vacant property or former owner; longer with a protected tenant.
• New York, New Jersey — post-sale possession procedures run through landlord- tenant courts that are notoriously slow. Plan on 2–6 months for former-owner eviction in downstate New York.
• Illinois, Ohio — writ of assistance issued by the foreclosure court; 30–60 days typical.

Non-judicial states: unlawful detainer

In non-judicial states, the new owner takes the trustee’s deed and then files a separate unlawful detainer (eviction) action against the occupants. This is a summary proceeding in most states, specifically designed to move faster than regular civil litigation.

• Texas — forcible entry and detainer suit filed in justice court; typical timeline 3–6 weeks from filing to writ of possession if uncontested.
• Georgia — dispossessory warrant filed in magistrate court; 7-day answer period; 30–45 days typical if uncontested.
• California — 3-day notice to quit for former owners, unlawful detainer action; 30–60 days typical but can extend significantly due to tenant protection laws and court backlogs.
• Arizona, Nevada — fast unlawful detainer procedures; 3–5 weeks typical.

Non-judicial states are generally faster because the court hearing is focused and short — no relitigating the foreclosure, just the right to possession.

State tenant protection overlays

Several states have enacted tenant protections that exceed the federal PTFA floor:

• California— the Tenant Protection Act of 2019 (AB 1482) requires just cause for eviction of tenants occupying for 12+ months, and can require relocation assistance (typically one month’s rent) when the new owner wants possession for personal use.
• New Jersey — the Anti-Eviction Act protects tenants from eviction without cause, including foreclosure-related dispossession. In practice, tenants in New Jersey can often remain indefinitely unless they breach the lease.
• Massachusetts, New York, Oregon, Washington — various just-cause eviction regimes limit the ability of a new owner to remove an existing bona fide tenant.
• Certain cities (DC, Seattle, San Francisco, Oakland, Chicago, New York City) — local rent control and just-cause ordinances can further restrict post-foreclosure eviction, sometimes requiring owner-intent affidavits and relocation payments.

Cash for keys

The legal process exists; the operational workhorse is cash for keys. An investor offers the occupant a cash payment — typically $500 to $5,000 depending on market and risk — in exchange for voluntary vacancy on a specified date, broom clean, no damage.

The math is usually straightforward. A contested eviction can run $1,500–$5,000 in attorney fees plus 60–180 days of carrying costs (taxes, insurance, utilities, vacancy loss, capital lockup). Paying the occupant $2,000 to leave in 14 days is almost always cheaper.

Cash for keys is not legally required anywhere, but it’s the industry standard way experienced investors actually take possession. The key operational detail: pay on verification, not in advance. The check is handed over only after the property is vacant and inspected.

Why the occupant decides the bid

A serious investor evaluates occupancy before setting a bid price, because occupancy is one of the largest variables in actual cash-on-cash return:

• Vacant property — immediate possession on certificate of title. Carry costs start and end with the rehab timeline. Most predictable.
• Former owner, cooperative — cash for keys resolves in 2–4 weeks. Add $1,000–$3,000 plus some carrying cost.
• Former owner, contested — full eviction process plus attorney fees. Add $2,000– $5,000 plus 2–4 months of carry.
• Bona fide tenant with lease — inherit the lease. May be acceptable (cash flow) or unacceptable (rehab-and-flip strategy). Impacts strategy, not just cost.
• Sham tenant — litigate sham status. Add 3–6 months and $3,000–$8,000 in legal fees.
• Squatter — file ejectment. Add 2–4 months and $2,000–$5,000 in legal fees plus potential property damage.

Drive-by occupancy checks before the sale — noting vehicles, mail, utilities, obvious signs of life — are among the most consistently profitable hours an investor can spend.

What not to do

• Self-help eviction — changing locks, shutting off utilities, or removing belongings without a court order is illegal in virtually every state and creates substantial civil and criminal exposure. The few remaining self-help states (historically Arkansas, Louisiana) have all added tenant protection limits in the last decade.
• Verbal handshake deals — always document cash-for-keys agreements in writing with a clear vacancy date, condition requirements, and payment terms.
• Threatening occupants — any threat or coercion, even implied, can constitute illegal eviction under state and sometimes federal fair housing law.
• Assuming PTFA doesn’t apply — failure to provide the 90-day notice where required can defeat an unlawful detainer and restart the clock.