Protecting Tenants at Foreclosure Act Returns
The Protecting Tenants at Foreclosure Act is back to protect renter’s! Tenants have been unprotected since January 1st, 2015. The original Act that was passed in 2009 protected tenants from being evicted in the event of a foreclosure on the landlord’s property until the expiration of the lease. This was subject to some restrictions, but it would not just put renters out on the street or scramble to find a place to live.
From 2015 until June 23rd, 2018, tenants were unprotected for the most part. Once foreclosed, the lender or new owner could sell the property or occupy it with little restriction. Fortunately, the Protecting Tenants at Foreclosure Act returns. The Act will help many tenants stay in their homes (at least until the end of their lease). The exception to this is if the purchaser of the property plans on using the property as their primary residence. In this event, the tenant would still get 90 days notice, before the lease can be terminated.
Tenants are protected under the Protecting Tenants at Foreclosure Act if they are bona fide tenants and do not meet the following items:
- Tenant is not the mortgagor (borrower) or the child, spouse, or parent of the mortgagor;
- Lease or tenancy constitutes an arms-length transaction; and
- Rent is not substantially less than the fair market rent for the property.
With the renewal of this Act, many tenants will not have to stress about where they are going to live after the home they were renting is foreclosed on. The eviction caused hardships for many families, especially in the rental climate we are currently in with increasing rents.
For more information regarding the Protecting Tenants at Foreclosure Act refer to Senate Bill 2155.