According to the National Low Income
Housing Coalition (NLIHC), tenants comprise 40% of the families facing
foreclosure. In the past, many tenants did
not know their homes were in foreclosure until they were forced to move out
with little to no notice after the foreclosure sale date. Landlords had
incentive to keep the foreclosure a secret from their tenants so that they
could collect rent in the meantime. As a result, tenants had little recourse
and were among the families hurt most by foreclosure.
In 2009, the Protecting
Tenants at Foreclosure Act was enacted in order to protect tenants of
properties in foreclosure from being evicted from their homes without due
notice. Under this Act,
a tenant had the right to stay in the property until the end of his or her
lease unless the new owner intended to live in the property. If the property
were to be owner-occupied, a 90-day notice was required before the tenant could
be evicted. Month-to-month tenants also required 90 days’ notice. No longer
were tenants forced to move out within a few days of being given an eviction
notice.
The Protecting
Tenants at Foreclosure Act was set to expire on December 31, 2012 but Section
1484 of the Dodd-Frank Act extended it to December 31, 2014. Two bills, S.1761
and H.R.
3543, were introduced in 2013 to permanently extend the Protecting
Tenants at Foreclosure Act. However, neither bill has been passed, and it
is unlikely that they will be passed in the next 2 days. It is possible,
however, that the bills can be enacted retroactively in 2015.
Without this Act,
tenants will not have the same heightened protections during the foreclosure
process. It is imperative that a bill is passed to ensure that tenants are
given due notice after a foreclosure sale date.
