Protecting Tenants At Foreclosure Act

Protecting Tenants At Foreclosure Act

If you haven't heard, the Protecting Tenants At Foreclosure Act was reinstated on June 23, 2018. The law is designed to protect Tenants from immediate eviction by anyone that becomes the owner of a residential property through the foreclosure process. It also extends additional protections for Tenants with U.S. Department of Housing and Urban Development Section 8 vouchers.

Under the law, the immediate successor in interest at foreclosure must: (a) provide bona fide tenants with 90 days' notice prior to eviction; and, (b) allow bona fide tenants with leases to occupy property until the end of the lease term, except the lease can be terminated on 90 days' notice if the unit is sold to a purchaser who will occupy the property. A lease or tenancy is bona fide if the tenant is not the mortgagor or the parent, spouse, or child of the mortgagor, the lease or tenancy is the result of an arms-length transaction, and the lease or tenancy requires rent that is not substantially lower than fair market rent or that is reduced or subsidized due to a Federal, State, or local subsidy. The law does not cover tenants facing eviction in a non-foreclosed property, tenants with a fraudulent lease, tenants who enter in lease agreements after a foreclosure sale, or homeowners in foreclosure. Additionally, the law does not affect the requirements of any State or local law that provides for longer time periods or extends additional protections to tenants.

Important information for anyone purchasing a foreclosed home with Tenants.