A law that expired in December 2014 was restored this month. The Protecting Tenants at Foreclosure Act (PTFA) is intended to shield tenants from eviction because of foreclosure on the property they occupy.
The PTFA applies in the case of any foreclosure on a federally related mortgage loan or on any dwelling or residential real property. Generally, tenants of foreclosed properties may have the right to remain in the property for at least 90 days after foreclosure and may have the right to stay longer.
Here are a few tips property managers should consider with the resurrection of the PTFA.
- Get familiar with Paragraph 4(I): Foreclosure of the Residential Leasing and Property Management Agreement (TAR 2201).
- Provide tenants with the General Information for Tenant of Property Facing Foreclosure (TAR 2220) form, which is updated to reflect the reinstatement of the PTFA.
- If you are managing a property under foreclosure, be sure to document everything you can.
- Avoid giving tenants or the owner legal advice and refer them to an attorney.
More information for renters in foreclosure is available from the National Low Income Housing Coalition.