As foreclosure rates in Florida continue to rise, many renters are being unexpectedly forced from their homes when the investment property they reside in is being foreclosed on. On May 20, 2009, President Obama signed into law the Protecting Tenants at Foreclosure Act of 2009 aimed at resolving this very issue.

Prior to the enactment of this law, foreclosure automatically extinguished any leases on the property and the purchasers of the home at auction could immediately evict the tenant. The law now allows for a lease to survive the foreclosure action, meaning tenants can stay at least until the end of their lease, or in the case of a month-to-month lease, tenants are entitled to 90 days notice before having to move. However, an exception was created for when the buyer of the foreclosed home intends to use the property as his/her residence.If the buyer intends to live on the property the buyer may terminate the lease with 90 days’ notice. Overall, the new law affords greater protections for tenants as at least some tenants will be able to remain in their homes until the end of their lease, or will at a minimum be given 90 days notice to relocate.

The law has also afforded protection to landlords in a roundabout way. Tenants with leases will have no legal recourse against their former landlords because their lease survives and ends as if there had been no foreclosure. Similarly, tenants with month-to-month leases will have no legal recourse against their former landlords because month-to-month leases may always be terminated with proper notice, and 90 days is much longer than the 15 days required by Florida law. However, a tenant with a lease who is forced to move out so the new owners may move in might consider suing their former landlord in small claims court for relocation and moving expenses, applications fees, or the difference, if any, between the new rent for a comparable rental and the rent under the old lease.

As a recently enacted law many landlords and/or tenants may not be aware of its requirements and it is still uncertain how the act will be enforced by the courts. If you have any questions regarding your rights as a tenant, or your liability as a landlord, of a home subject to a foreclosure action please contact the Law Offices of W. Trent Steele at 772-408-6969 for a free consultation.