New Protections for Tenants in Foreclosed Properties
President Obama signed S. 896, P.L. 111-22, on May 20, 2009.
This bill includes a nationwide 90 day pre-eviction notice
requirement for tenants in foreclosed properties. The provisions
of the bill are effective on enactment, May 20, 2009.
Specifically, the new law will require that the immediate
successor in interest at foreclosure
1. provide bona fide tenants with 90 days notice prior to
eviction and
2. allow bona fide tenants with leases to occupy the 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 bona fide lease or tenancy is
one where the tenant is not the mortgagor or a member of the
mortgagor's family, 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 is
reduced or subsidized due to a Federal, State or local subsidy.
For section 8 tenants the new law amends section 8(o) to provide
that in the case of an owner who is an immediate successor in
interest pursuant to foreclosure during the term of the lease
vacating the property prior to sale shall not constitute other
good cause, except that the owner may terminate the tenancy
effective on the date of transfer of the unit to the owner if
the owner (i) will occupy the unit as a primary residence and
(ii) has provided the tenant a notice to vacate at least 90 days
before the effective date of such notice. In addition, in the
case of any foreclosure on any property in which a recipient of
section 8 assistance resides, the immediate successor in
interest in such property pursuant to the foreclosure assumes
such interest subject to the lease between the prior owner and
the tenant and to the housing assistance payments contract
between the prior owner and the public housing agency for the
occupied unit.
None of these provisions preempt more protective state and
local laws and all of these provisions expire at the end of
2012.
Frequently Asked Questions and Answers from the National Low
income Housing Coalition about: NOTICE TO TENANTS OF BUILDINGS
SOLD AT FORECLOSURE AFTER MAY 20, 2009
Can the person who buys the building at foreclosure make
me leave right away?
No.
The new owner needs to end your tenancy by giving you a 90-day
notice to leave.
If you have an unexpired lease, you may be able to stay until
the end of the lease.
What can I do if the new owner says I have to leave in
less than 90 days?
You can send a letter telling the new owner about the law.
Keep a copy of the letter you send.
It may help to go to the post office and pay for a return
receipt to make the new owner sign to prove they got your
letter.
If you get in the mail a green receipt signed by the new owner,
save that receipt.
You must also offer to pay the new owner your rent.
What happens if I don't pay the new owner rent?
The new owner can send you a letter giving you notice to pay
or move.
What if I have a one-year lease that has more than 90 days
left?
In most cases, the new owner cannot evict you until the end
of the lease. There are two exceptions.
If the new owner wants to use your home as their primary
residence, the new owner only has to give you a 90-day notice to
leave after they become the owner.
If you do not pay your rent, the new owner only has to give you
a written notice.
What if the new owner files an eviction?
File an answer with the court that says the new owner failed
to give the notice required by the Protecting Tenants at
Foreclosure Act, Pub. L. No. 111-22, S702 (2009).
Go to court on the date the court sets for a trial.
Take with you to court:
1. the copy of your letter to the new owner.
2. the green return receipt, if you received on.
3. the copy of the new law that is attached to this notice.
4. a copy of your lease, if you have one.
What if I am a section 8 tenant?
You have all of the rights listed above regarding your lease
and the requirement that the owner give you a 90-day notice to
leave.
You also have additional protections.
The Section 8 Housing Assistance Payment contract continues.
The foreclosure is not a lawful reason to terminate your lease.
Call your Section 8 worker and tell the worker what is
happening.
Thanks to Larry Gardella, Legal Services of Alabama and to
the National Housing Law Project.
From:
NLIHC.org
For additional information, please contact Danna Fischer, 202
507-7462 or
danna@nlihc.org
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