Because the PTFA has no enforcement provisions (there is no agency responsible for enforcing the provisions of the law), tenants and their advocates must understand the provisions of the PTFA and be prepared to assert their rights.

This webpage is designed to assist tenants and their advocates to protect and enforce their rights under the PTFA.  While every effort has been made to provide accurate information, the material provided on this page, including the draft documents provided in the attached Toolkit, are only recommendations and do not constitute legal advice. In all cases, tenants are advised to contact an attorney.

The PTFA is designed to provide most tenants who live in a property that has been foreclosed on with at least a 90 day notice before they can be required to vacate a property after foreclosure. 

It does not matter if the tenant has a written lease, an oral lease or is on a month to month lease, so long as the lease is one that is recognized by the law of the applicable state.

The PTFA protects any legitimate rental arrangement created before title to the property is changed as a result of the foreclosure.

The 90 day period begins when the person or entity that acquired the title to the property after the foreclosure provides the notice to the tenant.

The form of the notice is defined by local law.

If a tenant has a lease that lasts beyond 90 days after the date the new owner acquires the property, then the tenant can stay for the remaining term of their lease, unless the new owner will live in the property.  In that case the tenant can be required to leave if the new owner gives the 90-day notice.

There are some limits on the tenants that can be protected under the PTFA:

  • The former owner of the property, and that former owner’s spouse, children and parents are not protected by the PTFA.
  • The rent paid by the tenant cannot be substantially less than that paid for similar properties in the area, unless the rent is reduced because of a federal or state rent subsidy.
  • The lease or rental arrangement must be an arm’s length transaction which means that rental terms that are outside the ordinary: long contracts, pre-paid rents, etc. may be subject to additional scrutiny.

Some state or local laws provide more protections for tenants, so it is important to consult the applicable local law.

Because the protections of the PTFA will differ with the laws of the applicable state and locality and individual facts, it is very important that tenants consult with their local legal aid office or an attorney.

Fannie Mae and Freddie Mac Rental Policies

The Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal National Mortgage Association (Fannie Mae) have policies that allow renters to stay in properties that they acquire through foreclosure. At a minimum these policies provide the protections available to bona fide tenants under the PTFA. However, both Freddie Mac and Fannie Mae hav programs that offer tenants with additional options. Freddie Mac also has a program that allows former homeowners to rent back their homes under certain conditions.

Section 8 Vouchers Holders

Section 8 voucher tenants have additional protections. When there is a Section 8 tenancy, the owner who is an immediate successor in interest at foreclosure takes subject to the Section 8 voucher lease and the Section 8 Housing Assistance Payments (HAP) contract. During the term of the lease, vacating the property prior to sale does not constitute good cause for eviction, except the owner may terminate the tenancy effective on the date of transfer of the unit to the owner if the owner will occupy the unit as a primary residence; and has provided the tenant a notice to vacate at least 90 days before the effective date of such notice.

State Resources

Some states have their own laws protecting renters in foreclosure, and some state-level organizations and agencies provide renters with resources to fight eviction due to forelcosure. Links open in a new window.

California

Tenants Together: Tenants in Foreclosure issue page- Includes a report on renters in foreclosure in California and resources for renters and advocates.

Connecticut

Connecticut Network for Legal Aid: What Tenants Need to Know- Comprehensive resources for Connecticut renters and their advocates. 

Massachusetts

Mass Legal Services: Tenant Rights After Foreclosure- Comprehensive resources for Massachusetts renters and their advocates. 

New Jersey

State of New Jersey: New Jersey Housing and Mortgage Finance Agency resources for renters- Includes a toolkit for tenants living in foreclosed properties in New Jersey.

To submit additional state resources to this list, contact Elayne Weiss, Policy Analyst, at eweiss@nlihc.org or 202.662.1530 x243.