Association as landlord?!  Occasionally it happens.  Our advice to clients who obtain ownership of a home through foreclosure is to rent it out until the first mortgage forecloses on the property.  One of the questions we are asked is, “What happens to our tenant when the bank’s foreclosure is completed?” The Protecting Tenants at Foreclosure Act answers that question and provides protections to tenants in foreclosed properties.  It has been in effect since 2009 and currently, is set to expire on December 31, 2014.  It provides that the purchaser of a foreclosed property (many times, the bank) must provide all tenants with at least 90 days notice prior to eviction.  It also provides that tenants must be permitted to stay in the residence until the end of the lease, with two exceptions: 1) the property is sold after foreclosure to a purchaser who will occupy the property as a primary residence; or 2) there is no lease or the lease is terminable at will.  Even if the exceptions apply, the tenant must be given 90 days notice prior to eviction.

Given that foreclosures are taking up to a year (and many times, longer), an association who takes ownership of a property through its own foreclosure action, can have a decent amount of time to receive rental income and recoup some of the funds owed by the prior owner and the costs of the foreclosure.  If you’d like more information on The Protecting Tenants at Foreclosure Act or foreclosure in general, please contact our office at 303-432-9999 to discuss this with one of our attorneys.

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