Under the new foreclosure prevention bill President Barack Obama signed into law on May 20, renters scored a big victory against foreclosure evictions.
Starting immediately, the Helping Families Save Their Homes Act allows tenants who pay their rent on time to remain in their foreclosed rentals through the end of their lease, unless the bank sells the property to someone who intends to make it their own residence, according to the Associated Press. If the home is sold to an investor or back to the lender, the new owner will have to allow the tenants to stay in the property for the full duration of the lease.
“These landmark pieces of legislation will protect hardworking Americans, crack down on those who seek to take advantage of them, and ensure that the problems that led us into this crisis never happen again,” said President Obama in a prepared statement.
Renters with no lease will be allowed to stay in their homes for 90 days after the foreclosure. The law is scheduled to expire in 2012. Before the new law, renters had little recourse because existing leases are terminated in a foreclosure sale. Now foreclosure buyers need to give the occupants a 90-day notice to leave. Tenants with a month-to-month lease are also entitled to a 90-day notice.
Some real estate investors are not pleased with the new eviction legislation.
“This is a bad law,” said Gregg Metcaff, a California real estate investor. “This is Chicago politics at its worst.”