On May 24, 2018 a permanent extension of the “Protecting Tenants at Foreclosure Act” (PTFA) was signed into federal law. The PTFA enables renters whose homes were in foreclosure to remain in their homes for at least 90 days or for the term of their lease, whichever is greater.
The PTFA, enacted in 2009 and originally expired at the end of 2014, was the only federal protection for renters living in foreclosed properties. During the financial crisis, bad faith and fraudulent lending, coupled with falling home prices and high unemployment, resulted in an astronomical high number of foreclosures in the U.S.
Renters lose their homes when the owner of the home they are renting goes into foreclosure.
The impact of these foreclosures was not limited to homeowners, however; renters lose their homes every day when the owner of the home they are renting goes into foreclosure. Unlike homeowners who know that a foreclosure is coming, renters are completely unaware. Yet, they continued to pay rent while the homeowner was not paying their lenders. Many renters can be evicted within a few days of the completion of the foreclosure.
The PTFA gives most renters at least to 90 days’ notice before being required to move after a foreclosure.
Under PTFA, tenants with Section 8 housing choice voucher assistance have additional protections allowing them to retain their Section 8 lease and requiring the successor-in-interest to assume the housing assistance payment contract associated with that lease.
The law applies in cases of both judicial and nonjudicial foreclosures.
The PTFA applies to all foreclosures on all residential properties; traditional one-unit single family homes are covered, as are multi-unit properties. Tenants with lease rights of any kind, including month-to-month leases or leases terminable at will, are protected as long as the tenancy is in effect as of the date of the completion of the foreclosure.
For more information about the PTFA, see: https://bit.ly/2L55LbE
NOTE: The PTFA applies in all states but does not override more protective state laws.
Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.
*Important Note from Diane: Everything on this web site is offered for educational purposes only and not intended to provide legal advice, nor create an attorney client relationship between you, me, or the author of any article. Information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state. Make sure to check out their reviews.*
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