There continues to be confusion on the protections of tenants in the event of foreclosure....irregardless of any state protections, the following are highlights of the FEDERAL law that was signed May, 2009.
If you are counseling tenants in properties under foreclosure, they should have a copy of this law and provide it to any and all contacts they have with the foreclosing lender. They should not ASSUME that the lender or servicing company knows OF or will ABIDE by this law so putting them on NOTICE that the tenant is aware of their protections is prudent.
http://www.fdic.gov/news/news/financial/2009/fil09056.html
Under the Protecting Tenants at Foreclosure Act:
- All tenants must receive a 90-day notice before being evicted as the result of a foreclosure.
- With some exceptions, the law requires that in the event of foreclosure, existing leases for renters are honored to the end of the term of their lease.
- The stated exceptions are for tenants without a lease, tenants with a lease terminable at will under state law, or where the owner acquiring the property will occupy it as a primary residence. In these cases, the tenants must receive a minimum of 90 days notice to vacate the property.
- This law does not affect the requirements of any state or local law that provides longer time periods or other additional protections for tenants.
- The new law does not require any agency to issue implementing regulations; these protections apply to foreclosures after May 20, 2009.
- FDIC examiners will monitor and enforce compliance with the requirements of this law in the same manner as other consumer protection laws and regulations
Wallace S. Gibson, CPM * GIBSON MANAGEMENT GROUP, Ltd.
Central Virginia
LandlordWhisperer
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Wallace, it's good to know tenants are protected in a foreclosed situation. Thanks for the update.
Michael * thank you and although this information has been out there, there are still lenders attemptiing to bully tenants out of properties
I have a situation like this right now where the lender is trying to throw the tenants out and the tenants are the victims here because they did not even know that the house was going to foreclosure.
Stella * tenants need to send a copy of the LAW and their LEASE to lender delivery confirmation and then alert the media!!!
Wallace, do you know of any language to insert in a lease at signing to protect the tenant?
http://activerain.com/blogsview/2388513/tenant-protection-language-forresidential-lease-whereby-landlord-defaluts-on-loan
Kathy * the lease is between the tenant and property owner. The federal and many state laws are the protections that tenants need to be aware of for they are against any successors in interest....