When the bubble burst and foreclosures and evictions climbed, tenants living in properties in foreclosure were left with little they could do to avoid immediate eviction. These renters who were not even aware that the property was in foreclosure and who had made timely monthly payments to the landlord month after month were being given only a few days notice to vacate the property. Thus, Congress moved to address this issue and passed the Protecting Tenants at Foreclosure Act (“PTFA”) in 2009, and again extended it to 2014 with the passage of the Dodd-Frank Reform act. This act provided various protections to bona-fide tenants residing in property in foreclosure, including being allowed to remain in the property if they had a valid lease.
The Protecting Tenants in Foreclosure act expired December 31, 2014, and with it the protections afforded tenants living in foreclosed property. Florida foreclosure actions are contractual in nature as the action is being brought on a note and mortgage, but they are also equitable actions. With the expiration of the PTFA, lenders should not expect to receive immediate possession of the property even if bona-fide tenants are living in these foreclosed properties. A Court may still elect to utilize its equitable powers and allow tenants a reasonable time to vacate the premises anywhere from a week to several weeks taking into account several equitable factors. The Courts may take into account whether there are children living in the property, the financial resources of the tenant, whether they have alternative places to live, and how much time the tenant requires to find new permanent premises. Despite the expiration of the PTFA, the above equitable factors will most likely still prevent the new property owners from taking immediate possession.
Many tenants when being forced to vacate with short notice may not be so kind to the bank’s collateral and may take retaliatory actions for the short noticed eviction. Shupe Dhawan partner, Neil Dhawan, believes in his experience it is best for lenders and servicers to amicably resolve tenant issues to ensure that the property is left in broom-swept condition and that there is not any unnecessary damage done to the premises. With the expiration of the PTFA, this becomes even more critical.
– Neil Dhawan, Esq.
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