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Post-PTFA: Look to the States (At Least for Now)

Posted By USFN, Tuesday, May 5, 2015
Updated: Friday, September 25, 2015

May 5, 2015


by Kevin Dobie
Usset, Weingarden & Liebo, PLLP
USFN Member (Minnesota)

On March 13, 2015, the “Permanently Protecting Tenants at Foreclosure Act of 2015” (H.R. 1354) was introduced. The legislation proposes to permanently extend the Protecting Tenants at Foreclosure Act of 2009. The bill was referred to the House Committee on Financial Services.

For the past several years, the federal Protecting Tenants at Foreclosure Act of 2009, Pub. L. No. 111-22, §§ 701-704, 123 Stat. 1660 (PTFA), has provided protections for certain bona fide tenants facing eviction. The PTFA expired on December 31, 2014, and asset managers will have to look to the state requirements for eviction actions.

In case you missed it, the PTFA required purchasers of foreclosure properties to send a 90-day notice to vacate to bona fide tenants prior to commencing an eviction action. The PTFA also compelled these purchasers to let certain tenants occupy the property for the duration of a bona fide lease; provided the lease was executed prior to the date the complete title was transferred to the foreclosure purchaser. (With one exception: a purchaser occupying the property as a primary residence could terminate the lease with a 90-day notice.)

Because the PTFA required action by foreclosure purchasers, the expiration of the PTFA has led to some uncertainty as to whether its provisions apply to foreclosures completed before the expiration date. It is fairly clear that the expiration of the PTFA means that its provisions no longer apply; nevertheless, many asset managers continue to mandate the 90-day notices for foreclosures completed before the expiration date. Adding to the complexity is the fact that most states have their own requirements for sending notices to quit prior to an eviction action. Reconciling the competing notice requirements requires a state-by-state analysis.

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