Evicting a tenant following foreclosure just lost a hurdle
Posted on 04/02/2015 at 08:25 AM by Jeffrey Baxter
The purchaser of a residential property following foreclosure (or the bank taking back the property) now has fewer hurdles to clear in order to evict a tenant residing in the property. That's because a law that had prevented new owners (including the foreclosing bank) from immediately evicting a tenant after the foreclosure of a federally-related mortgage loan has expired. The Protecting Tenants at Foreclosure Act was passed in May 2009, and extended as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, amidst the foreclosure mitigation programs arising from the 2008 financial crisis. It created several protections for tenants living in a property that was foreclosed. Following a foreclosure, the new owner would take the property subject to the terms of any exiting arms-length fair market Lease, other than one to the mortgagor, or spouse, parent or child of the mortgagor. An exception was made for a purchaser at foreclosure who intended to reside in the property. In that case, a 90 day notice period was required before the new owner could initiate eviction proceedings. If the property was subject to no lease, or if the lease was scheduled to expire within 90 days of the foreclosure, tenants in possession of the property would receive a minimum of 90 days' notice, before an eviction could be filed. Attempts were made to remove the sunset provision in the Act, in legislation introduced in both chambers of Congress earlier in the last session; however, neither the House nor Senate took action on the measures. It is unlikely that similar attempts would be successful in the current session, given Republican control of both chambers and a general lack of receptiveness to the need for the continuation of such protections.
Accordingly, following the foreclosure of a property, tenants leasing a foreclosed property may be evicted in accordance with Iowa's Uniform Residential Landlord and Tenant laws. If you have any questions related to this topic, or any other question regarding your real property, please contact a member of Dickinson's Real Estate Group.
The material in this blog is not intended, nor should it be construed or relied upon, as legal advice. Please consult with an attorney if specific legal information is needed.
- Jeff Baxter
Categories: Jeff Baxter, Real Estate & Land Use, Banking Law
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