It’s been common for residential tenants with valid leases who’ve paid all their rent on time to be evicted if their building is foreclosed on, sometimes with very short notice. The foreclosing lender wants to empty the building to make it easier to sell, but the practice can involve hardship and distress for the evicted tenants – who aren’t in default.
The Protecting Tenants at Foreclosure Act, signed by the President and effective on May 20, protects residential tenants by requiring the new owner to permit them to live in the property until their leases expire (as would have been the case if the building had been sold instead of foreclosed on). If a tenant has no lease or has a lease that can be terminated at will, or if the property is sold to a purchaser who will occupy it as his or her primary residence, the tenant must be given 90 days’ notice of eviction. So in most cases the tenant’s lease will be honored, and at a minimum the tenant will have 90 days to find and move to a new home.
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