11/16/2011
Something of interest to tenants who may be renting a home going into foreclosure:
TITLE VII—PROTECTING TENANTS AT FORECLOSURE ACT
SEC. 701. SHORT TITLE.
This title may be cited as the ‘‘Protecting Tenants at Foreclosure
Act of 2009’’.
SEC. 702. EFFECT OF FORECLOSURE ON PREEXISTING TENANCY.
(a) IN GENERAL.—In the case of any foreclosure on a federallyrelated
mortgage loan or on any dwelling or residential real property
12 USC 5220 note.
PUBLIC LAW 111–22—MAY 20, 2009 123 STAT. 1661
after the date of enactment of this title, any immediate successor
in interest in such property pursuant to the foreclosure shall assume
such interest subject to—
(1) the provision, by such successor in interest of a notice
to vacate to any bona fide tenant at least 90 days before
the effective date of such notice; and
(2) the rights of any bona fide tenant, as of the date
of such notice of foreclosure—
(A) under any bona fide lease entered into before the
notice of foreclosure to occupy the premises until the end
of the remaining term of the lease, except that a successor
in interest may terminate a lease effective on the date
of sale of the unit to a purchaser who will occupy the
unit as a primary residence, subject to the receipt by the
tenant of the 90 day notice under paragraph (1); or
(B) without a lease or with a lease terminable at will
under State law, subject to the receipt by the tenant of
the 90 day notice under subsection (1),
except that nothing under this section shall affect the requirements
for termination of any Federal- or State-subsidized tenancy
or of any State or local law that provides longer time
periods or other additional protections for tenants.
(b) BONA FIDE LEASE OR TENANCY.—For purposes of this section,
a lease or tenancy shall be considered bona fide only if—
(1) the mortgagor or the child, spouse, or parent of the
mortgagor under the contract is not the tenant;
(2) the lease or tenancy was the result of an arms-length
transaction; and
(3) the lease or tenancy requires the receipt of rent that
is not substantially less than fair market rent for the property
or the unit’s rent is reduced or subsidized due to a Federal,
State, or local subsidy.
(c) DEFINITION.—For purposes of this section, the term ‘‘federally-
related mortgage loan’’ has the same meaning as in section
3 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C.
2602).
SEC. 703. EFFECT OF FORECLOSURE ON SECTION 8 TENANCIES.
Section 8(o)(7) of the United States Housing Act of 1937 (42
U.S.C. 1437f(o)(7)) is amended—
(1) by inserting before the semicolon in subparagraph (C)
the following: ‘‘and in the case of an owner who is an immediate
successor in interest pursuant to foreclosure during the term
of the lease vacating the property prior to sale shall not constitute
other good cause, except that the owner may terminate
the tenancy effective on the date of transfer of the unit to
the owner if the owner—
‘‘(i) will occupy the unit as a primary residence;
and
‘‘(ii) has provided the tenant a notice to vacate
at least 90 days before the effective date of such
notice.’’; and
(2) by inserting at the end of subparagraph (F) the following:
‘‘In the case of any foreclosure on any federally-related
mortgage loan (as that term is defined in section 3 of the
Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2602))
or on any residential real property in which a recipient of
Notice.
Deadline.
Notice.
Deadline.
VerDate Nov 24 2008 16:47 May 28, 2009 Jkt 079139 PO 00000 Frm 00031 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL022.111 GPO1 PsN: PUBL022 etreine on CSHP91QD1 with PUBLIC LAWS
123 STAT. 1662 PUBLIC LAW 111–22—MAY 20, 2009
assistance under this subsection resides, the immediate successor
in interest in such property pursuant to the foreclosure
shall assume such interest subject to the lease between the
prior owner and the tenant and to the housing assistance
payments contract between the prior owner and the public
housing agency for the occupied unit, except that this provision
and the provisions related to foreclosure in subparagraph (C)
shall not shall not affect any State or local law that provides
longer time periods or other additional protections for tenants.’’.
SEC. 704. SUNSET.
This title, and any amendments made by this title are repealed,
and the requirements under this title shall terminate, on December
31, 2012.
