Renters Protection Law Set to Expire

December 1, 2014

During the mortgage crisis, many renters were evicted from their homes when landlords lost property to foreclosure. Often renters were given just a few days to leave, even though all rents were paid current. Renters are generally given little or no warning when landlords are in default on mortgage loans. Under the “first in time, first in right” property rule, a lease signed after a mortgage was obtained is voided once that mortgage is foreclosed.

In 2009, President Obama signed the Protecting Tenants at Foreclosure Act (PTFA) into law that gave tenants the right to stay for the term of the lease if the property was purchased by an investor at a foreclosure sale, or 90 days if the house was purchased by an owner with the intention to occupy it as a residence. This law is set to expire December 31, 2014. If PTFA is allowed to expire, renters will again be subject to state law which leaves tenants in over half the country without protection or recourse during a landlord’s foreclosure.

The National Housing Law Project, a nonprofit national housing and legal advocacy center, reports that “nationwide as many as 40% of the families that face eviction due to foreclosure are renters.” Several bills have been proposed in Congress to extend the PTFA deadline. Recently, Representative Keith Ellison (D-MN) proposed a bill to make PTFA permanent. Representative Ellison has urges other Representatives to join him so that renters are “protected irrespective of where a foreclosure takes place.” Senator Richard Blumenthal (D-CT) also introduced a bill in November 2013 to make the PTFA permanent, S. 1761.

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