Archive for category Foreclosures

On June 29, 2009 Governor Jim Doyle signed the 2009-11 state biennial budget bill into law.  This law in part made modifications to the Tenant Protection Act (starts on page 108) which offers tenants certain protections during the foreclosure process.  My earlier post on the Tenant Protection Act can be read here.

Specifically, the state budget bill modified the current law related to tenant protections in foreclosure actions as follows:

1.      ADDED – If  an eviction action seeks to remove a tenant whose tenancy was terminated as a result of a foreclosure judgment and sale, the complaint must identify that the lawsuit is an eviction that is being brought as a result of a foreclosure action.

2.     ADDED – A tenant cannot be named as a party in a foreclosure action unless s/he  has a lien or ownership interest in the property.  The fact that a tenant lives in the rental property that is being foreclosed upon is not enough to name them as a party in a foreclosure action.

3.     ADDED – If a tenant is improperly named as a party in a foreclosure action the court shall award the tenant $250 in damages plus his/hers reasonable attorney’s fees.

4.     DELETED – The portion of the Tenant Protection Act that required the exclusion of any tenant information related to foreclosure actions from appearing on CCAP.   That section was replaced with #2 above.

Tags: Evictions, Foreclosures, Legislation

A new law has recently been passed that will affect rental property owners that may be in the unfortunate position of having their properties foreclosed upon as well as those individuals that may be purchasing a property that has been foreclosed.  Sen. Lena Taylor’s bill referred to as the “Tenant Protection Act” (SB 78) was incorporated into the budget repair bill that was recently passed. 

The new law requires that the property owner notify any prospective tenant in writing that (a) a foreclosure action has been commenced, and (b) if a judgment for foreclosure has already been entered, the date when the redemption period expires.  Further any rental agreement that is entered into while a foreclosure action is pending must include a separate written statement, signed by the tenant, stating that the owner has provided the above notice to the new tenant.  The rental agreement will be voidable at the option of the tenant if it does not include the written statement.

With regard to current tenants, the new law requires that the plaintiff in the foreclosure action (typically a financial institution) give the tenants several notices advising them as to the status of the foreclosure action.  Failure to provide the notices will allow the tenant to be awarded $250 in damages plus reasonable attorney’s fees.

Also under the new law, if a tenancy is terminated as a result of a foreclosure judgment the tenant may retain possession of the unit for up to 2 months after the end of the month in which the sale of the property is confirmed (but the tenant must pay rent during this period at the same rate that was applicable prior to the confirmation).  Also the tenant may withhold rent in an amount equal to the security deposit during the last month of possession.  Furthermore, no eviction judgment for the removal of the tenant whose tenancy was terminated as a result of a foreclosure judgment, may be executed before the end of the second month after the foreclosure sale was confirmed.

Finally, if an eviction action was commenced against a tenant and their removal from the rental property was due to a mortgage foreclosure then no information regarding that eviction can be included on CCAP.

The newly enacted law can be viewed here (it starts on page 108)

Tags: Evictions, Foreclosures, Legislation