Tenants in Foreclosure

What happens to tenants when the owner loses the home in foreclosure? Before 2009, when an owner was foreclosed, the lease with the tenant was automatically terminated. That meant that the tenant had to get out immediately after the Certificate of Title was issued to the new owner. The federal government recognized that it just wouldn’t be fair to suddenly throw good tenants out on the streets just because their landlords were having financial problems. Some landlords knew they were being foreclosed, but never even told their tenants. This left tenants out in the cold, sometimes literally. Congress passed the 2009 Protecting Tenants at Foreclosure Act ("PFTA"), to protect tenants from such scenarios. The PFTA provided a minimum of 90 days’ notice to remove a tenant after a foreclosure. That law has protected tens of thousands of tenants from having to suddenly pack up and get out in 24 hours. The 2009 PTFA, however, had what is called a “sunset” provision. It was written in such a way that if Congress failed to renew it, it would expire…and that is exactly what has happened. The PTFA expired on December 31, 2014, and as of this writing, it has not been renewed. This means that tenants were once again left without protection and may be kicked out on a moment’s notice.

Fortunately, the State of Florida came to the rescue and enacted Ch. 83.561, which provides that the new owner taking title to the property after a foreclosure sale must give the tenant(s) a 30-day written notice of terminating the lease. What’s more, the statute even provides what the notice must say and how it must be sent. Simply sending an email or text that says, “get out” will not be enough. If you are in such a situation, I strongly advise that you contact a competent landlord-tenant attorney to discuss your situation.