What do I need to know?
On May 20, 2009 President Obama signed a law that gives some new protections
to most tenants whose landlords are going through foreclosure. The law takes
effect immediately. Here is the gist of the law:
- for a tenant at will (no lease), the new owner
must give you 90 days notice before bringing an eviction action.
- for a tenant with a lease, the new owner
must honor the terms of the lease, unless he is planning to live in the unit.
In that case, the new owner must give you 90 days notice to move.
- For Section 8 tenants, the new owner must honor
your lease unless the unit will be used as the new owner's home. Again, a
new owner who plans to live in your unit must give you 90 days notice to move.
Learn more details below.
What are your rights, with and without a lease?
Again, the law protects tenants with a lease differently from those without
a lease. Here are the details:
- No lease (tenants at will) and month-to-month
renters: Again, the new owner must give you at least 90 days notice to quit,
or notice to vacate.
- Tenants with longer-term leases: Tenants
with leases have greater protection. Most tenants with leases will be able to
stay until the end of their lease term. But if the
new owner plans to live in your unit, then the same rules that apply to
month-to-month tenants apply to you. You are entitled to 90 days notice before
the new owner can bring an eviction against you.
However, your lease will be protected only if:
- you are not a close family member of the landlord in foreclosure,
- your tenancy is the result of a genuine business deal, and
- the rent is fairly close to the fair market price.
These exceptions are meant to address "sweeheart" deals - where your tenancy is not
a typical business arrangement. Tenants of subsidized housing (e.g. "Section 8" voucher
choice tenants) are protected by this law.
How does this work for tenants with Section 8 assistance?
The new law provides similar protection for tenants with Section 8 housing aid
but it works a little bit differently. For starters, your lease and Housing Assistance
Payment (HAP) contract will carry over and be in effect between you and the new
owner. Your landlord can't force you to move simply to make sure the building is
empty as part of the foreclosure.
Exception: It is possible for the new owner
to evict you before the end of your lease, but only if:
- Your unit will be used as the new owner's home, and
- The new owner gave you at least 90 days notice.
How does this new federal law fit in with existing state laws on evictions?
We interpret this law to mean that, in the context of a foreclosure, the
state law's 30 day notice to quit for tenants with no lease is expanded to 90 days.
If you fail to pay rent or commit another evictable offense, the usual state notice
laws may still apply.
Learn more about Maine eviction laws in Rights of Tenants in Maine.
How do I know who to pay rent to?
Typically, it is the current owner who is entitled to the rent payments. So do your best
to figure out when the building is changing hands. Then start paying rent to the new
owner. If you are in doubt, or you cannot figure out who owns the building,
be sure to save your rent money. Then you
will be able to pay the new owner when the time comes, giving you the option to
stay longer. At the very worst, you will have saved the money you will need to move.
If there are signs that the current owner has stopped taking care of your building or stopped making utility payments
for services like water, you may want to get legal advice before making any more rental payments.
Call Pine Tree Legal Assistance with any questions
As with any new law, situations will arise that raise more questions as to exactly
how the law applies. If you have any questions, or need help because your landlord
is in foreclosure, call Pine Tree Legal Assistance.
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Notice
© Pine Tree
Legal Assistance
January 2010
Sometimes the laws
change. We cannot promise that this information is always
up-to-date and correct. If the date above is not this year,
call us to see if there is an update.
We provide this
information as a public service. It is not legal advice.
By sending you this information, we are not acting as your lawyer.
Always consult a lawyer, if you can, before taking legal action.
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