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New Protections for Tenants in Foreclosed Properties
FOR IMMEDIATE RELEASE
(ATLANTA, GA. July 2009)
New Protections for Tenants in Foreclosed Properties (ATLANTA, GA. July 2009) During the foreclosure crisis, renters in good standing have been evicted from properties in foreclosure with little or no notice. To address this problem and to stabilize neighborhoods, Congress passed and President Obama signed the Protecting Tenants at Foreclosure Act of 2009. Effective May 20, 2009, most tenants will now have the right to remain in their homes after foreclosure for ninety days or, in some cases, until the end of their lease term. The law applies to any foreclosure on a federally related mortgage or any residential mortgage foreclosure occurring after May 20, 2009. Unless extended, the law=s protections will expire on December 31, 2012. Prior to enactment of the Protecting Tenants at Foreclosure Act of 2009, the law in Georgia was that a foreclosure terminated the tenant=s lease and the tenant could be asked to vacate immediately following the foreclosure sale. If the tenant refused to vacate, judicial action could be filed to evict the tenant. Federal law now provides that the purchaser at a foreclosure sale must permit tenants with leases entered into before the notice of foreclosure to occupy the premises until the end of the lease term. If the tenant=s lease has less than 90 days remaining, the tenant must be given a 90 days notice before having to vacate the property. If the tenant does not have a written lease or has a month-to-month lease, the tenant must still be given a 90 day notice to vacate. Only if the purchaser at foreclosure intends to use the property as his primary residence may the tenant=s lease be terminated and then only with a 90 day prior notice. Section 8 housing voucher tenants are given additional protections under the Act. The purchaser at foreclosure must accept the Section 8 voucher holder=s lease and the former owner=s subsidy contract with the housing authority. The purchaser at foreclosure will be entitled to the housing subsidy payments and the rent under the tenant=s lease. At the end of the voucher lease, the new owner may terminate the tenancy by providing the tenant a 90-day notice to vacate. The only exception is that the owner can terminate the housing voucher lease and subsidy contract if he intends to occupy the unit as a primary residence but only if the tenant is given 90 days prior notice to vacate. To be covered under the Act, the lease must not be between family members. For example, the lease cannot be between the former owners and that owner=s child, spouse, or parent. Further, the lease must be the result of arms-length transaction and the rent must not be substantially less than the fair market rent for the property unless the unit=s rent is reduced due to a Federal, state, or local subsidy.
The Dalton Office of the Georgia Legal Services Program® has asserted the Act=s protections to prevent the eviction of a tenant when a bank foreclosed on the property she and her family were renting under a year long lease. Georgia Legal Services Program=s® mission is to provide access to justice and opportunities out of poverty for low-income Georgians. AOur work changes lives, saves lives, and strengthens our communities. Without Georgia Legal Services, many of our clients could not get access to our legal system because they are isolated, ill, elderly, or abused. We help our clients become self-sufficient and able to take care of themselves and their children,@ said Executive Director Phyllis J. Holmen. For more information on the Georgia Legal Services Program®, log onto www.glsp.org or contact the Georgia Legal Services Program office in your area. About the Georgia Legal Services Program®: The mission of the Georgia Legal Services Program® is to provide access to justice and opportunities out of poverty for Georgians with low-incomes. Our lawyers and paralegals provide the help that reflects your community's values of fairness, equality, and responsibility to assist others in need; www.glsp.org.
