Michigan Foreclosure Task Force: Resources for RENTERS
Federal Law Provides Protections for Tenants in Foreclosed Properties
The Protecting Tenants at Foreclosure Act (“PTFA”) of 2009 [PDF] is a federal law that gives tenants in foreclosed properties extra protections. It will only be in effect until the end of 2014.
Basically, this law:
- Applies to any foreclosure (with only a few exceptions);
- Requires the “successor in interest” (typically the foreclosing bank) of the foreclosed owner to honor the lease of any bona fide tenant in the property or provide at least 90 days notice to vacate to any bona fide tenant;
- Applies to any legitimate ("bona fide") lease or tenancy where the rent is not substantially less than fair market rent, and the tenant is not the foreclosed owner (or the child, spouse, or parent of that person);
- If the tenant uses a Section 8 voucher as part of the rental agreement, the "successor in interest" must continue the Section 8 voucher tenancy and sign on to the housing assistance payment (HAP) contract -- the foreclosure is not "good cause" to terminate the voucher tenancy.
To learn more about the Protecting Tenants at Foreclosure Act of 2009, please visit the National Low Income Housing Coalition’s Renters in Foreclosure Toolkit.
This page was last updated November 30, 2010.