With the housing market still recovering from the economic stint, many people are thinking twice before they sign mortgage papers and starting to lean towards a rental agreement. But since many of these renters aren’t your typical kid out of college, they might be taking a second look at the quality of the lease agreement for a single family home.
In 2009, the Protecting Tenants at Foreclosure Act was implemented to protect residential tenants from being promptly evicted following foreclosures. This law generally applies to all residential leases. Seeing as how it’s still few and far between to drive down the road without seeing foreclosure signs, this act ensures that all tenants receive a 90-day notice before the eviction.
For the lease to be legit, the tenant cannot be the mortgagor or the parent, spouse, or child of the mortgagor. Additionally, the lease must be the result of a secondary party, and rent must be in the neighborhood of fair market value for the property, except if rent is reduced due to a subsidy (federal, state or local.) An invalid agreement gives the owner the opportunity to waive the 90-day notice; otherwise the terms of the lease will be honored.