Generally, tenants can stay. In New Jersey a foreclosure does not end a residential lease, the new owner generally takes the property subject to the tenancy, and a tenant can be evicted only for the good-cause reasons in the Anti-Eviction Act, such as nonpayment of rent.
New Jersey's protections for renters in foreclosed homes are among the strongest in the country. A change of ownership alone is not a lawful reason to evict, and nobody, including the bank or the sheriff sale buyer, may change the locks, remove belongings or shut off utilities to force a tenant out. Only a court judgment followed by a lawful eviction process can require a tenant to leave. There are exceptions, such as certain small owner-occupied buildings, so a tenant under pressure should confirm how the law applies to their home.
Keep paying rent in full and on time, since nonpayment is one of the few grounds a foreclosure opens for eviction, and keep proof of every payment. If someone says they are the new owner, ask for written proof, such as the deed, before sending rent anywhere else. If you are named in court papers, respond by the deadline. Cash-for-keys offers are legal and optional, and because the law generally lets you stay, you can negotiate the amount and date in writing or simply decline. Legal Services of New Jersey (1-888-576-5529) helps tenants who qualify.
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Educational information, not legal advice. Your own court documents control your deadlines; a licensed New Jersey attorney can confirm what applies to your case.