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Protecting Tenants
May 29th, 2013 10:03 AM

Even with inventories down, there are still some foreclosures for sale and about 20% of those properties are occupied by rental tenants whose protections are sometimes overlooked or ignored in the sales process.

Tenants' rights were strengthened considerably in 2009 by the enactment of a federal law known as the Protecting Tenants at Foreclosure Act (PTFA).  The PTFA provides two types of protections to tenants, depending on their situation.  Tenants with a long-term lease agreement are entitiled to continue renting the home for the duration of their lease.  The new owner of the foreclosed home must abide by the terms of the existing agreement.  That also means no rent increases or other changes to the terms are allowed during that time.  Third parties acting on behalf of owners, including real estate agents and attorneys, must abide by the PTFA.

There is one exception: If the new owner intends to live in the property as a primary residence, tenants can be required to vacate the property before the end of the lease term with a minimum of 90 days notice.  For short-term tenants and those with no legal lease, the law requires that you provide a minimum of 90 days notice before you can legally evict. 

Tenants need to be aware of their legal rights as no one knows if or when a homeowner may become involved in a financial crisis that would result in a foreclosure.  The PTFA is in effect through December 31, 2014, though efforts are underway to make it permanent. 

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Posted by Barbara Doeringer on May 29th, 2013 10:03 AMPost a Comment

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