They may have had a valid lease and be current on their rent, but their rights were lost once the property was foreclosed. Often, in an effort to keep paying tenants for as long as possible, the landlord would not disclose the upcoming foreclosure to the tenants.
Mesa/Phoenix, AZ (PRWEB) August 20, 2009
Renters need not fear being blindsided by foreclosure and becoming homeless overnight -- new federal legislation provides tenants of foreclosed rental property plenty of notice and, more importantly, peace of mind.
On May 20, 2009, President Obama signed the Helping Families Save Their Homes Act of 2009 into law, requiring parties who acquire residential property as the result of a foreclosure sale, either to honor existing leases or to provide a written 90-day notice to vacate the property to tenants occupying the residence at the time of the sale.
"This legislation gives some much-needed protection for tenants of foreclosed properties," says attorney Charlotte Johnson of Gibson Ferrin & Riggs, PLC.
"Many tenants have been living in fear of foreclosure, at no fault of their own, never knowing when they may have to pick up and move the next day," she says. "They may have had a valid lease and be current on their rent, but their rights were lost once the property was foreclosed. Often, in an effort to keep paying tenants for as long as possible, the landlord would not disclose the upcoming foreclosure to the tenants."
However, that will no longer be a worry to home renters.
"Tenants are rewarded for making timely rent payments under a proper lease agreement, rather than having incentive not to pay rent if they know their landlord is being foreclosed."
She says that unless the acquiring party intends to personally occupy the property as his or her primary residence, he or she must honor the terms of existing lease, allowing bona fide tenants to stay for the remainder of the lease term.
"The lease must have been entered into before the landlord received the notice of foreclosure sale," she adds. In most cases, Arizona tenants can verify whether notice of sale has been given by checking with the recorder's office for the county in which the property is located.
Other restrictions include that the tenants cannot be a spouse, child or parent of the foreclosed mortgagor, or owner; and the tenants must not pay substantially less than the fair market rent for the property, unless they are certain government-subsidized tenants.
Ms. Johnson points out that, more often than not, the acquiring party is the mortgage lender or an investor who may actually prefer to keep the tenants, considering the slow pace that foreclosed properties are being turned over.
"If tenants do not qualify as having a bona fide tenancy, as described in the Act, or in the rare event the acquiring party intends to personally occupy the property, tenants will still have at least have 90 days notice to make new living arrangements," she says. "In Arizona that is the same amount of notice that homeowners, including landlords, are given of a foreclosure sale. Now, rather than rely on insensitive landlords, it becomes the acquiring party's duty to give notice to the tenants of the sale," Ms. Johnson explains.
This program is scheduled to expire on Dec. 31, 2012.
Call attorney Charlotte Johnson at 480-633-8100 with any questions concerning Helping Families Save Their Homes Act of 2009, renter's or homeowner's rights, or to schedule a confidential and comprehensive consultation.
The attorneys at Gibson Ferrin & Riggs, PLC concentrate their practice on serving individuals, families and small business owners with business-related issues, family law and estate planning. They can help identify and assess the interests that matter most to their clients and work to preserve, promote and protect them. Visit their website at http://www.gfrlegal.com and their blog at http://www.biziboom.com. The firm's expertise in commercial litigation and business, family and estate law is recognized throughout the Mesa / Phoenix area.
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