In a judicial foreclosure, it is quite common for the tenant to be listed as a party to the lawsuit. This means that the tenant would be served by a process server or constable when the case is initially filed with the court, as well as be notified of any action that takes place throughout the case.
However, in a nonjudicial foreclosure, unless they are alerted ahead of time by the previous owner, tenants are generally not notified about the change of ownership until after the sale has taken place.
For those who are renting property affected by foreclosure, the Protecting Tenants at Foreclosure Act of 2009 is a federal law that offers some protections to "bona fide" tenants who could face evictions from their home after the sale. Under this Act, most tenants with a lease can stay in the home until their lease expires. However, if the new owner intends to move into the home, this will not apply. In those circumstances, the new owner must give the tenant at least 90 days' notice of their intent to terminate the lease.
For a tenant with no lease, such as a "month-to-month" renter, they also must be given 90 days' notice should the new owner decide they would like the tenant to move out of the property.
If the tenant does not move out within the specified time frame, the new owner would then need to file an eviction case against them in court in order to have them removed from the property. See the Eviction page of our Landlord/Tenant research guide to learn more about this process.