THE PROTECTING TENANTS AT FORECLOSURE ACT
The federal Protecting Tenants at Foreclosure Act ensures that tenants receive notice that their residential rental property was sold to a new owner at a foreclosure sale. To prevent an abrupt eviction, the Act requires the new owner to give tenants at least 90 days to leave the rental. If the property reverted to the bank or will not be used as a primary residence by the new owner, the bank (or new owner) must allow the tenants to remain in the rental until their lease expires.
The Act only protects the rights of “bona fide” tenants, which includes persons in possession of property with or without a lease, provided that:
• The person isn’t the new owner or the owner’s child, spouse or parent;
• The tenancy was the result of an arms-length transaction; and
• The rent is not substantially less than what the property’s fair market rent is (unless the rent is government-subsidized).
Section 8 Tenants
The law provides “Section 8” tenants with all of the same rights as other tenants. The new owner must give the tenant a 90-day notice to leave if the owner intends to occupy the property as a primary residence. The tenant’s Section 8 Housing Assistance Payment contract continues, and foreclosure is not a lawful reason for the owner to terminate a lease.
Enforcement of the Act
The law is self-regulating, which means that no government agency enforces it. Also, federal courts have ruled that tenants cannot file lawsuits under the Act. However, tenants may have other causes of actions or remedies and should speak to an attorney about their legal rights.
Reproduced from http://www.ag.idaho.gov/publications/consumer/LandlordTenant.pdf
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