| There are estimates that up to 40% of homes | | | | earlier. |
| which have been foreclosed upon in the US are | | | | The 90 day eviction guideline also has exceptions |
| actually homes which renters lived in and have a | | | | and allows certain situations wherein the new |
| rental lease signed and in place. In many of these | | | | homeowner who bought the property at a |
| situations, the landlord is desperate and | | | | foreclosure auction does not have to provide the |
| embarrassed and does not tell his renters about | | | | renters with 90 days notice. This is only true if |
| the foreclosure proceed that affects the rental | | | | the renter meets all three of the following: |
| property they are living in until the very last | | | | 1. Neither the renter nor his spouse, parents, |
| minute, so renters have little time to find | | | | children ever owned the property. |
| somewhere else to live. | | | | 2. The rental lease is an arms-length transaction. |
| The Obama Administration enacted the Protecting | | | | 3. The rent payment listed in the rental lease is |
| Tenants from Foreclosure Act, a law setting forth | | | | fair market rent value, with the exception if it is |
| new restrictions on the time limit for foreclosure | | | | government-subsidized. |
| and eviction notices, in an attempt to protect the | | | | These exceptions were created to prevent what |
| rights of renters and avoid eleventh hour evictions | | | | is called "sweetheart deals" wherein renters try to |
| and relocations,. | | | | gain a few months of free living without fear of |
| It is beneficial to review the old foreclosure and | | | | eviction by cheating the system. |
| eviction system in order to fully comprehend the | | | | This new law opens the door to a wave of |
| new law. Traditionally, rental leases or contracts | | | | lawsuits against landlords, where renters try to |
| stay in place when a property is sold and the new | | | | make a quick buck and accuse their landlords of |
| buyer must honor the rental lease. Foreclosure | | | | breach of contract. It is the landlord's duty to |
| cases were excluded from this guideline. When a | | | | stay informed of the risk and exposure to |
| rental property was foreclosed upon, the new | | | | lawsuits such as these so that they can prepare |
| buyer had the right to terminate the rental lease | | | | ahead of time should they find themselves in a |
| and deliver an eviction notice if it was required to | | | | position where renters are looking to take |
| remove a renter. | | | | advantage of the landlord. Both renters and |
| The new law sets forth that rental lease | | | | landlords should be well informed on the provisions |
| contracts are still in effect after a foreclosure sale | | | | of the new bill so they can be prepared in case of |
| if an investor buys the property, but not for | | | | a foreclosure. |
| someone who intends it to be his home, with | | | | There is no way to definitively determine if the |
| some exceptions. If the property was purchased | | | | new law will cause foreclosure prices to decrease, |
| to be used as a home and the buyer wants to | | | | as buyers are reluctant to buy if there is a |
| live in the property, the buyer has the option to | | | | possibility of having to go through a potentially |
| serve the renter with an eviction notice, but he | | | | lengthy eviction procedure before they can move |
| must provide them with 90 days advance notice. | | | | into or otherwise appropriate the property they |
| Existing rental lease contracts also persist after | | | | have just bought. |
| the foreclosure sale if the rental lease was signed | | | | The bill's expiration date is currently December 31, |
| prior to the origination of the foreclosing loan, as | | | | 2012, and hopefully by then the increased |
| in the case if a lease was signed three years | | | | frequency of foreclosures will have subsided. |
| earlier, but the loan was only originated one year | | | | |