July 01, 2009
P.L. 111-22: A Hurdle for Purchasers of Foreclosed Homes.
A bona fide tenant renting a home will be entitled to a 90-day notice before being evicted by the new owner upon foreclosure of the home. On May 19, Congress passed a Senate version of the Protecting Tenants at Foreclosure Act of 2009 (also known as the Helping Families Save Their Homes Act of 2009). It was signed by President Obama and took effect the following day, May 20.
The 90-day notice is a minimum requirement; a tenant with additional protections already in place (e.g., "Section 8" tenants) won't lose those existing protections. The Act defines bona fide in such a way as to prevent the prior owner from abusing the requirement by mischaracterizing himself as a tenant.
The notice is relatively simple to execute. And as the Washington Post suggested last week, it may not be slowing down the resale process. Still, it is a hard and fast required step. The Obama administration's summary of the legislation as passed is here. It includes a sunset provision that terminates its requirements on December 31, 2012.
Posted by Rob Bodine at July 1, 2009 12:35 AM