The Protecting Tenants at Foreclosure Act, (“Act”) which was enacted in 2009, provided protections to tenants in foreclosed properties.  The Act provided 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 provided 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 applied, the tenant had to be given 90 days notice prior to eviction.

Earlier this year, a bill was introduced to enact the Permanently Protecting Tenants at Foreclosure Act. (“PPTFA)”  Specifically, the proposed legislation would provide protections under the former act permanent, regardless of when a foreclosure takes place and would also ensure compliance with the law by creating a private right of action for tenants wrongfully evicted.  But the Act expired on December 31, 2014 and was not extended by Congress.

So what now?  The Act provided additional protections to tenants; it did not preempt state and local laws governing landlords and tenants.  Because it has now expired, tenants are not provided any additional protections in foreclosed properties.  State law requires a three day notice to quit be provided to tenants before eviction proceedings can be commenced in a court of law and there are no longer additional protections afforded to tenants who lease a home in foreclosure.  Please read Association as Landlord – Now What?

If you have questions about how this may affect your association or properties within your community, please contact one of our attorneys at 303-432-9999.

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