The Protecting Tenants in Foreclosure Act Explained

The Protecting Tenants in Foreclosure Act took effect on May 20, 2009 to protect tenants from eviction because of foreclosure on the properties they occupy. This Act applies to cases of foreclosure on a “federally-related mortgage loan, any dwelling or residential real property.” Under the Protecting Tenants in Foreclosure Act, the immediate successor in interest, the one who is now in charge of the property, must provide tenants with a notice to vacate with at least a 90-day notice before the date is effective. The day when the complete title to a property is transferred to the successor in interest is the date of a “notice of foreclosure.” If you do not have a lease, the purchaser can assume a writ of possession and have you removed immediately. Tenants are allowed to stay on the property until their lease ends; however, there are two exceptions. The first exception is if the property is purchased after foreclosure with the intent to occupy the property as a primary residence. The second exception is if there is no lease or the lease is terminable at will under law. Although there are these two exceptions for certain situations, tenants must still receive a 90-day eviction notice. The Protecting Tenants in Foreclosure Act applies to tenants under a “bona fide” lease or tenancy. A lease is “bona fide” only if: • the mortgagor under the contract is not the tenant • the lease or tenancy was a product of an arm’s-length transaction • if the lease or tenancy requires the receipt of rent that is not substantially less than fair market rent or the rent is reduced or subsidized. The opinions in this post are solely those of the author. The author takes full responsibility for the content. Like all blog posts, this is offered for general information purposes and does not constitute legal advice. This post was written by Stephen Hachey. Follow Stephen on Google, Facebook, Twitter & Linkedin.