Tenants Protected by Leases on Foreclosed Homes
Protecting Tenants at Foreclosure Act of 2009
Please see attached PDF: On May 20, 2009, the legislation referred to as "Protecting Tenants at Foreclosure Act of 2009” came into effect and provides tenants with leases the ability to remain in a foreclosed property at least until the end of the lease, and month-to-month tenants are entitled to 90 days' notice before having to move, for all federally related loan foreclosures of residential property. An exception was made for the buyer who intends to live in the property who may terminate a lease with a 90 day notice.
Prior to May 20, 2009, most tenants were forced out of the property upon foreclosure. In Arizona, if the loan was recorded before the lease was signed the foreclosure would wipe out the lease. As of May 20th, leases survive the foreclosure, therefore allowing the tenant to occupy the property until the end of the lease period and month-to-month tenants are entitled to a 90 notice. The new rule applies to Section 8 tenants as well.
