NLCHP Report on Renters and Foreclosure
In December, 2012 The National Law Center on Homelessness and Poverty released a report that focuses on one of the most overlooked aspects of the foreclosure crisis. The impact of the foreclosures on renters. According to the report by the end of 2010, 10% of all homes with a mortgage had been foreclosed upon, 20% of those foreclosures were on rental property, and approximately 40% of families facing eviction due to foreclosure are renters.
The report titled Eviction (Without) Notice: Renters and the Foreclosure Crisis focuses on renters and the 2009 federal law designed to protect them during a foreclosure. The law – Protecting Tenants at Foreclosure Act (PTFA) created new rights for tenants living in forclosed properitites
The Protecting Tenants at Foreclosure Act of 2009 (“PTFA”) was enacted in response to the growing impact of the foreclosure crisis on tenants and the lack of protections available to them at the state and local levels. The PTFA provides that a successor in interest, often a financial institution such as a bank, assumes title to a foreclosed property subject to the interests of any bona fide tenants residing there. The fundamental purpose of the federal law is to protect renters living in foreclosed properties from abrupt evictions and to give them adequate time to find alternative housing.15 To achieve this aim, the PTFA provides bona fide tenants with the right to remain in their homes for the duration of their lease agreement or, if a tenant has a short term lease or no lease, for a minimum of 90 days with notice.
Some of the findings of the report are:
Common violations of the PTFA reported include:
- Lack of communication from the new owner
- Illegal, misleading, or inaccurate written notices
- Harassment from real estate agents, law firms, or bank representatives
- Failure to maintain the property
- New owners’ bad faith assertions that respondents’ tenancies are not bona fide;
- Failure of new owners to determine the occupancy status of residents in foreclosed properties;
- Failure of new owners to provide information on where to pay rent and/or to request property maintenance.
The report also goes further and makes recommendations for further protecting renters during foreclosure.
Some of the recommendations are:
- Congress should pass legislation to make the PTFA permanent federal law. The PTFA is currently set to expire on December 31.
- Congress should amend the PTFA to include an express private right of action. This amendment would allow tenants whose rights have been violated under the PTFA to seek relief in court.
- State legislatures should enact increased protections for renters living in foreclosed properties. At a minimum, these protections should mirror those of the PTFA ensuring that the majority of leases survive foreclosure and providing at least 90 days advance notice to tenants.
- The Monitor of the national mortgage settlement should ensure that the banks governed by the consent judgments comply with their obligations to renters in foreclosed properties.
The full report can be downloaded here: http://www.nlchp.org/content/pubs/12.17.12%20Eviction%20Without%20Notice%20FINAL.pdf
The NLCHP states
The PTFA is an important step toward complying with the International Covenant on Economic, Social and Cultural Rights (“ICESCR”) to which the United States is a signatory. Article 11(1) of the ICESCR states that all parties to the Covenant recognize that housing is a human right and that they will take appropriate steps to ensure the realization of that right.18 The Committee on Economic, Social, and Cultural Rights’ General Comment 4 to Article 11 of the ICESCR lists seven aspects of the human right to housing, including security of tenure.19 Security of tenure guarantees legal protection against forced eviction and other threats to housing security, which is the primary aim of the PTFA.