Act protects renters amid foreclosures
Act protects renters amid foreclosures
Renters living in foreclosed homes have been thrown a lifeline.
In the past, a few days after a foreclosed home was sold in a trustee sale, renters heard a knock on the door. They had to go. Never mind the fact that they still had plenty of time left on their lease. That contract was wiped out by the foreclosure. The bank which likely took over the home wasn't interested in being a landlord.
All that changed on May 20, when Congress passed the Protecting Tenants at Foreclosure Act.
It says renters must now be given at least 90 days before they have to go. And they might be able to stay longer. If the new owner is an investor, the terms of the lease still hold. The renter doesn't have to leave until the lease runs out, and the payment has to stay the same. If there is no lease, the 90-day rule still applies.
Now there are some rules. The renter can't be the person who lost the home in foreclosure, or their family. The lease needed to be an arms-length transaction, meaning it can't be rented to a friend at the last minute. And the rent has to be "not substantially less" than fair market.
It could complicate life for some banks, and even for people who want to buy foreclosed homes. But it brings a little fairness back to a system that often tossed innocent
Posted at 03:45PM Sep 09, 2009 by Louisa Ward & Robyn Viktor in General | Comments[0]
