Tenant Protection in Foreclosures Applies to Deeds in Lieu
Posted By Cliff Tuttle | November 6, 2010
No. 524
The “Protecting Tenants at Foreclosure Act” (PTFA) provides that tenants of foreclosed-upon owners cannot be summarily evicted by the foreclosing lender, but are entitled to the full term of a written lease or a minimum of 90 days after notice to quit. An exception was created when a purchaser who intends to live in the premises takes over, subject to receipt of a prior 90-day notice by the lender. In other words, if the lender never gave a 90-day notice to vacate, the tenant retains his right under the statute to continue to occupy the premises to the end of the term of the written lease, or 90 days, whichever is longer.
It is also worth noting that this statute was amended at Section 1484 of P.L. 111-203, the “Dodd-Frank Wall Street Reform and Consumer Act.” Under the amendment, notice of foreclosure is sufficient to trigger the tenant’s protections under PTFA, even if title is subsequently transferred by a deed in lieu of foreclosure. This means that the Tenant protections apply even though the foreclosure never proceeded beyond the initial notice, despite the fact that the property was voluntarily conveyed by a deed in lieu of foreclosure. The amendment also extended PTFA to 2014.
CLT
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