Do Illinois Renters Have Rights During Foreclosure?

 Posted on September 25, 2025 in Real Estate

Foreclosure may sound like a problem only for the homeowner. Unfortunately, that is not always the reality. If you are renting a home, and your landlord’s property goes into foreclosure while you are living there, you may be left with nothing but questions. Can you be forced to leave your home? Are you still required to pay rent? Is your landlord the bank, the buyer, or is there still a landlord?

An Illinois foreclosure can be disruptive, to say the least. That said, there are certain protections in the state provided to tenants to keep them from being blindsided by a foreclosure and possible eviction. To find out more about how your landlord’s foreclosure could potentially affect you and your family, it can be beneficial to speak to a knowledgeable Grayslake, IL foreclosure defense lawyer.

How Could Foreclosure Affect Illinois Renters?

While an Illinois foreclosure transfers ownership, it does not erase the fact that tenants live in the home and have certain rights. Illinois renters are protected during a foreclosure by the federal Protecting Tenants in Foreclosure ACT (PTFA) and Illinois’ mortgage foreclosure laws (735 ILCS 5/15-1504).

Renters who have a fixed-term lease must have that lease honored by the new owner. The new owner must also provide 90 days’ notice to tenants prior to terminating a lease. Month-to-month tenants are also entitled to a 90-day written notice to vacate. Section 8 tenants have additional protections in place. Tenants may not use the foreclosure as a legal reason to stop paying rent to the current landlord.

Renter protections are limited during foreclosure in situations where the renters do not have a valid, fixed-term lease or when the lease was signed after the foreclosure case began. Even during foreclosure, renters can be evicted for failing to pay rent. The protections for renters during foreclosure may not apply when the renter is a child, spouse, or parent of the owner facing foreclosure.  

What Should Renters Do When Their Home Is Being Foreclosed On?

The most important thing for renters to know is that they should always keep paying rent to the landlord. Ensure there is a "bona fide" lease, which means it is a fixed-term lease that was signed before the foreclosure process began. Renters should make sure they know who the new owner will be, in the event the new owner attempts eviction in the face of a valid fixed-term lease.

Renters with a valid lease must be given 90 days’ written notice before the lease can be terminated. The new owner cannot force renters out; the legal process in Illinois must be followed. Renters should contact a real estate lawyer to ensure they understand their rights and are protected.

Renters Should Beware of Scams Involving Renters When a Property Owner is Foreclosed On

Unfortunately, scammers have developed methods to take advantage of renters living in homes that are being foreclosed. These scams involve an individual posing as the new owner or property manager to illegally collect rent from the tenants.

Scammers find properties through public foreclosure notices and then pose as the new landlords, even using aggressive tactics to demand immediate rent. Scammers may also post fraudulent rental ads online for foreclosed properties they do not own to collect application fees, security deposits, and the first month’s rent.

Always verify the new owner’s identity. Illinois law requires new owners to send two types of written notice to tenants within 21 days after a foreclosure sale is approved by a court. These notices include the new owner’s contact information, instructions for paying future rent, and the statement "This is NOT a notice to vacate the premises."

Contact a North Chicago, IL Real Estate Lawyer

If you are a renter in Illinois facing a landlord’s foreclosure, you still have rights. When you speak to a Grayslake, IL foreclosure defense attorney from Newland & Newland, LLP, we can review your lease, explain your legal protections, and help you navigate this extremely stressful situation. Our attorneys are local to Illinois with decades of experience between them. The main attorney has served on the Board of Directors of the Illinois Real Estate Lawyers Organization. Call 847-549-0000 to schedule your free consultation.