New Law Protects Tenants

By Lynne Ausman

While the foreclosure crisis and the homeowners who are losing their homes have been covered by the media, renters whose landlords are foreclosed on are often overlooked. The new Protecting Tenants at Foreclosure Act of 2009 aims at helping renters.

While the foreclosure crisis and the homeowners who are losing their homes have been covered by the media, renters whose landlords are foreclosed on are often overlooked. The new Protecting Tenants at Foreclosure Act of 2009 aims at helping renters.

Imagine living in an apartment for the past 12-months. You pay your rent in full and on time each month. While it’s hard to make the payments and pay the rest of your bills and buy necessities (electric, gas, water, phone, food, school supplies, clothing, etc.) the rent is the first thing you pay each month. Your two children are in elementary school and have good grades; they like their school and their teachers.

Today starts like any other day; you get your children off to school and head to work. When you get home that evening, you find your landlord at your door telling you that he has just been foreclosed on – and you have to leave. You have less than 24 hours to vacate the property or your belongings will be put on the curb for trash pickup.

What do you do? How do you find a new place to live and move in less than 24 hours? Where do you go for help? What recourse do you have? Until recently, the answer was to take what you can and hope a family member or a friend will take you in until you can find another apartment. You have no one to turn to for help; there are no laws to protect you or to save your home. Finding a new apartment proves to be difficult. You were barely making your rent, and now you have to come up with a security deposit and rent at a new place.

All of this changed May 20 with the Protecting Tenants at Foreclosure Act of 2009, which was passed as Title VII of Public Law 111-22. The provisions are “self-executing”; no federal agency (such as HUD) is responsible for ensuring compliance. The law was effective as of May 20.

It is the responsibility of tenants, landlords, public housing authorities, courts, lawyers and community activists to understand the new law and to ensure that the rights of renters are protected.

Prior to this act, when a landlord was foreclosed on, the tenants were immediately evicted, with few if any options to save their homes. Because the tenant was not being evicted in the traditional sense, landlords were not required to give any notice. In many occasions, renters were paying their rent on time each month.

The Protecting Tenants at Foreclosure Act provides a small safety net for renters who find their landlords in foreclosure. At minimum, it provides renters with a 90-day notice before being evicted as a result of foreclosure. Many tenants with a lease will be able to stay in their homes until the end of the lease. Tenants living in Section 8 housing are also protected. Any new owner of a foreclosed home that is currently housing a Section 8 tenant must accept the lease and housing-assistance payment contract. If the new property owner intends to live in the home as a primary residence, Section 8 tenants and renters with leases can be evicted; however, they must be given a 90-day notice.

The law expires in 2012.

Bottom line is that low-income renters are often trying to make it month by month. Their apartment is what keeps them off the streets and out of shelters. When their landlord is in foreclosure, the tenants are not made aware of the situation until it is too late and they are forced to move. Where do these families go? Why didn’t the landlord pay the mortgage with the rent they are collecting?

The Protecting Tenants at Foreclosure Act is a baby step in the right direction to ensuring that renters are not forced into homelessness due to their landlord’s inability to pay the mortgage. It’s not foolproof and there are likely to be more renters who are evicted without notice. Because the act is self-executing, demanding compliance will be difficult until the word gets out about the act and its provisions. Few news outlets have run the story.

Advertisements