The “Helping Families Save Their Homes Act” includes some provisions to protect tenants from eviction as a result of a foreclosure proceeding on the property. During the past few years, many families living in rental homes throughout the United States were evicted without prior notice when the home they had been living in was foreclosed on. Most of the time, the family had no idea the property was in financial distress until the eviction.
That all changed with the new law, which went into effect last year. Tenants now must be provided 90 days notice prior to being evicted when their rental home is foreclosed upon. Additionally, tenants must be allowed to stay in the home through the end of the lease – with two major exceptions.
- The new owner wants to occupy the property as a personal residence; and
- There is no lease (month-to-month), or there is a lease but state law permits the lease to be terminated at any time
Even under these exceptions, tenants must be given 90 days notice before they can be evicted. These protections only apply to “bona fide tenants”, defined as those with a written contract that was a result of an arms-length transaction and the rent is not substantially less than fair market rent.
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