New law requires that landlords tell tenants about any foreclosure.  This is good news for tenants: as of September 13, 2013 House Bill 2281 amends the Arizona Residential Landlord and Tenant Act, Arizona Revised Statutes 33-1331, to require owners to provide tenants with a written notice within 5 business days of receiving a notice of trustee’s sale.  The old law only required notice if that provision was in the lease.

If the owner receives a foreclosure notice after renting the property, the owner shall, within 5 days, provide the tenant notice of the foreclosure.

33-1331 B. IF THE OWNER RECEIVES A NOTICE OF TRUSTEE’S SALE OR OTHER NOTICE OF FORECLOSURE ON THE PROPERTY AFTER A TENANT HAS ENTERED INTO A RENTAL AGREEMENT ON THE PROPERTY, THE OWNER SHALL PROVIDE THE TENANT WITH WRITTEN NOTICE AS PRESCRIBED IN SUBSECTION A OF THIS SECTION WITHIN FIVE BUSINESS DAYS AFTER RECEIPT OF THE NOTICE OF TRUSTEE’S SALE. THIS SUBSECTION APPLIES ONLY TO THE FIRST NOTICE OF TRUSTEE’S SALE OR THE FIRST NOTICE OF FORECLOSURE RECEIVED BY THE OWNER AFTER THE TENANT HAS ENTERED INTO THE RENTAL AGREEMENT

Republican Rep. Steve Smith of Maricopa says he sponsored the bill after renters complained they were tossed out by banks or new owners without notice.  There are numerous stories of tenants returning home and finding the locks changed and their possessions removed.  Many found their valuable items “gone” without explanation.  The landlords failure to notify the tenants caused a great deal of difficulty because the tenants normally had 5 days to move out of the home once the foreclosure was completed.

We have several videos on our web site.  Below are a few that might be of interest:

  • “Lender’s Foreclosure Rights in Arizona”
  • “Should I keep my home or let it go into foreclosure?”
  • “Meet Ms. Drain and Suggestions on How to Hire an Attorney”

This new law will be helpful to the tenants, but only if the landlords/owners comply.  My opinion – they won’t.

Diane L. Drain