Since the last election, President Trump and the Republican-controlled Congress have worked to undo many of the laws and regulations aimed at consumer protection passed under the Obama administration in response to the financial crisis. On May 24, 2018, however, the President signed a bill—ironically aimed at further deregulation—that permanently extended one of the Obama-era consumer protection laws. The 2009 “Protecting Tenants at Foreclosure Act” (“PTFA”), which by its own language terminated in 2014, has been revived and permanently reinstated.
The PTFA set out to create a national standard to protect tenants of those landlords who lose their property in foreclosure actions. Under the PTFA, most tenants are entitled to continue to live at a foreclosed property until they are either given 90 days’ notice to move or their lease expires—whichever allows the tenants to put off moving for longer. For example, if a tenant that qualifies for the PTFA’s protections has 9 months left on her lease, and her landlord loses the property to foreclosure, the purchaser at the foreclosure sale must permit the tenant to continue to live at the property for the remaining nine months. The PTFA is broad – it applies to both judicial and nonjudicial foreclosures of residential property and any kind of tenancy in place when title to the property passes from the landlord to purchaser at the foreclosure sale.
When the PTFA originally sunset in 2014, the fate of tenants of a foreclosed property was subject to state law, which of course varied from state to state. In Oregon, for example, the notice rules for tenants in nonjudicial foreclosure proceedings differ from those in judicial proceedings. With the extension of the PTFA, however, there is again a uniform national “baseline” of protection for these tenants. While states are free to give additional protections to tenants of foreclosed landlords, they cannot go lower than the floor set by the PTFA.
Joshua Feil is an associate in the Litigation and Creditors’ Rights & Bankruptcy practice groups. The information in this article is not intended to provide legal advice. For a professional consultation, please contact Erich Paetsch or Joshua Feil at Saalfeld Griggs PC. 503.399.1070. firstname.lastname@example.org © 2018 Saalfeld Griggs PC