NJ Law: N.J.S.A. 2A:18-61.1 ET SEQ [Tenants in Foreclosure Homes]
I have to post my comments on this in my blog. New Jersey law states that is you are renting a home, and the home is foreclosed on, you pretty much NEVER have to leave. Just keep paying your rent to the new owner or lender in the case of an REO and they can never ask you to leave! If you were to have a 10 year lease with the prior owner for let's say $900 a month (well below market value) for a 4 Bedroom house, the lender would have to honor that lease! They have NO indications in the law to what "market value rent" should even be! Could you rent for $50 a month?....well, I would not press your luck with that one! :)
What's better, is that the lender would have to maintain the property or face criminal charges! HA! "Hello, Mr. Lender, yes this is YOUR tenant at 123 Main Street and I'm just calling you to inform you that the roof is now leaking and needs to be fixed!" WOW! And they have to fix it! WHAT A COUNTRY!
Ok, what do I conclude after reading this? Well, considering I do short sales for a living, I think I will start using this little bit of information in my short sale negotiations. "Yes Ummmm, [Insert Bank Name], the current home owner is considering renting the property out on a 10 year lease if we can not come to an agreement on this short sale. Do you happen to have a written lease your company uses or would you like me to make it up for the current owner?" OUCH! Lovin' it! Talk about short sale incentives...forget HAMP/HAFA, this is the best incentive I've seen yet!
This law is so ambiguous, I'm sure it will tie up the court systems like there is no tomorrow and be changed 50 times before long. But, for now, tenants that live in foreclosure homes should feel safe that they will not be on the streets anytime soon! Just make sure the rent is there on the first of the month (or what ever day they spell out), and you will be good to go!
On a side note, AGENTS, DO NOT attempt to have any tenant removed from a house that is in foreclosure (short sale) or has been foreclosed on...you could lose your license and face CRIMINAL charges! Additionally, your short sales that you now have with tenants in them; make sure you have your ducks in order and the tenant (if there is one), has plans to vacate prior to settlement. Find out their intentions....just don't ever say "You have To Leave!"
SAMPLE OF THE FORM THAT THE NEW OWNERS MUST SEND TO THE TENANT WITHIN 5 DAYS AFTER SHERIFF SALE...(You should see the restrictions on this! Font size, bold, etc etc)....
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NOTICE TO TENANTS
THE FORMER OWNER OF . . . . . . . . . . . . (insert property address) HAS LOST THE PROPERTY AS A RESULT OF A FORECLOSURE. IF YOU ARE A TENANT AT . . . . . . . . . (insert property address) YOU HAVE THE RIGHT TO REMAIN IN YOUR HOUSE. THE NEW OWNER CANNOT FORCE YOU TO MOVE OUT BECAUSE OF THE FORECLOSURE.
YOU ARE PROTECTED BY NEW JERSEY'S ANTI-EVICTION ACT, N.J.S.A. 2A:18-61.1 ET SEQ. FROM THE TIME YOU RECEIVE THIS AND UNTIL FURTHER NOTICE, YOU SHOULD PAY RENT TO ......(insert name and address of person to whom rent is due) PLEASE SEND RENT BY ......(insert method of transmission) ON THE ......(insert day) OF EACH MONTH.
WITH LIMITED EXCEPTIONS, THE NEW JERSEY ANTI-EVICTION ACT, N.J.S.A.2A:18-61.1 ET PROTECTS YOUR RIGHT TO REMAIN IN YOUR HOME. FORECLOSURE ALONE IS NOT GROUNDS FOR EVICTION OF A TENANT. YOU ARE PROTECTED BY THIS LAW EVEN IF YOU DO NOT HAVE A WRITTEN LEASE.
THE NEW OWNER CANNOT EVICT YOU WITHOUT"GOOD CAUSE," AS DETERMINED BY A COURT.
THIS MEANS THAT ONLY A SHERIFF'S OFFICER WITH A COURT ORDER MAY REMOVE YOU FROM THE PREMISES, AND ONLY AFTER YOU HAVE BEEN GIVEN THE OPPORTUNITY TO DEFEND YOURSELF AGAINST EVICTION IN COURT.
EXAMPLES OF "GOOD CAUSE" ARE FAILURE TO PAY RENT, WILLFULLY DAMAGING THE PREMISES, OR PERSONAL OCCUPANCY BY THE NEW OWNER. IT IS ILLEGAL FOR THE NEW OWNER TO TRY HAVE YOU REMOVED.
A RESIDENTIAL TENANT IN NEW JERSEY CAN BE EVICTED ONLY THROUGH A COURT PROCESS. ONLY A COURT OFFICER WITH A COURT ORDER MAY REMOVE YOU FROM THE PREMISES, AND ONLY AFTER YOU HAVE BEEN GIVEN THE OPPORTUNITY TO DEFEND YOURSELF IN COURT.
INDIVIDUALS CAN BE SUBJECT TO BOTH CIVIL AND CRIMINAL PENALTIES FOR TRYING TO FORCE YOU TO LEAVE YOUR HOME IN ANY OTHER MANNER, INCLUDING SHUTTING OFF UTILITIES OR OTHER VITAL SERVICE OR FAILING TO MAINTAIN THE PREMISES.
IF THE NEW OWNER PRESSURES YOU TO LEAVE, CONSULT WITH AN ATTORNEY OR FILE A COMPLAINT WITH YOUR LOCAL PROSECUTOR. YOU MAY, HOWEVER, ACCEPT FINANCIAL COMPENSATION FOR LEAVING VOLUNTARILY IF THE NEW OWNER OFFERS SUCH COMPENSATION. IF SOMEONE IS PRESSURING YOU TO LEAVE, CONSULT WITH AN ATTORNEY.
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