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Tenants Now Have Not Less Than 90 Days To Vacate After Foreclosure

Tenants Now Have Not Less Than 90 Days To Vacate After Foreclosure

On May 24, 2018, federal law (PL 115-174) was enacted permanently bringing back the previously sunset 2009 Protecting Tenants at Foreclosure Act (which expired on December 31, 2014).  This law now gives residential tenants 90 day notice to vacate a residential property in lieu of 60 days.  The law gives substantial protection to tenants.

Moreover, if there was a bona fide lease was created prior to the creation of foreclosure, it’s likely the buyer at the trustee sale will have to abide by the terms of that lease, for whatever time is remaining on the lease.

The law states:
•In all cases, renters will get at least a 90-day notice prior to eviction.
•Renters can stay until their lease runs out except when the new owner will occupy the home as a primary residence, when renters have no lease or when renters have only a month-to­ month lease. Even for these three exceptions, the 90-day notice still applies.

The new law applies only to a “bona fide” lease or tenancy. Bona fide means:
•The tenant is not the landlord or a child, spouse or parent of the former owner.
•The lease or tenancy is the product of an “arm’s length trans­ action” with no conflict of interest.
•The rent is not substantially less than the fair market price.
•The rent is sharply reduced because of a government subsidy (tenants in Section 8 subsidized housing have separate protections under this law).

Renters should ensure they stay in good standing with regard to their rental property.
Some tips on how to prove you are in good standing include:
•Sign a written lease.
•Pay your rent on time and in full.
•Use checks rather than cash to provide a record of payment.
•Pay your rent at the market rate. Paying a lower rent to a friend or family member will cut your costs, but may weaken your legal standing during a foreclo­ sure or legal dispute.

Dodd-Frank Reform and Tenant Protections in Foreclosure

https://www.congress.gov/bill/115th-congress/senate-bill/2155

 

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