Protecting Tenants at Foreclosure Act - Greenberg Traurig LLP
Protecting Tenants at Foreclosure Act - Greenberg Traurig LLP
Protecting Tenants at Foreclosure Act - Greenberg Traurig LLP
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Real Est<strong>at</strong>e Alert<br />
JUNE 2009<br />
ALBANY<br />
AMSTERDAM<br />
ATLANTA<br />
AUSTIN<br />
BOSTON<br />
CHICAGO<br />
DALLAS<br />
DELAWARE<br />
DENVER<br />
FORT LAUDERDALE<br />
HOUSTON<br />
LAS VEGAS<br />
LOS ANGELES<br />
MIAMI<br />
NEW JERSEY<br />
NEW YORK<br />
ORANGE COUNTY<br />
ORLANDO<br />
PALM BEACH COUNTY<br />
PHILADELPHIA<br />
PHOENIX<br />
SACRAMENTO<br />
SHANGHAI<br />
SILICON VALLEY<br />
TALLAHASSEE<br />
TAMPA<br />
TOKYO<br />
TYSONS CORNER<br />
WASHINGTON, D.C.<br />
WHITE PLAINS<br />
ZURICH<br />
Str<strong>at</strong>egic Alliances with<br />
Independent Law Firms<br />
BERLIN<br />
BRUSSELS<br />
LONDON<br />
MILAN<br />
ROME<br />
<strong>Protecting</strong> <strong>Tenants</strong> <strong>at</strong> <strong>Foreclosure</strong> <strong>Act</strong><br />
On May 20, 2009, President Obama signed into law the Helping Families Save Their<br />
Homes <strong>Act</strong> of 2009, which includes Title VII, <strong>Protecting</strong> <strong>Tenants</strong> <strong>at</strong> <strong>Foreclosure</strong> <strong>Act</strong><br />
(the “<strong>Act</strong>”). The <strong>Act</strong> provides th<strong>at</strong> in the case of any foreclosure on a federallyrel<strong>at</strong>ed<br />
mortgage loan or on any dwelling or residential real property, the party<br />
taking title to property pursuant to the foreclosure (“Foreclosing Party”) assumes<br />
the property subject to the rights of any bona fide tenant. If the Foreclosing Party<br />
wishes to evict the tenant, the Foreclosing Party must provide the tenant with 90-<br />
days notice to vac<strong>at</strong>e. However, if a bona fide lease was entered into before the<br />
d<strong>at</strong>e of the foreclosure, the tenant has the right to remain <strong>at</strong> the property until<br />
the end of the lease term, except th<strong>at</strong> the lease may be termin<strong>at</strong>ed prior to the<br />
expir<strong>at</strong>ion of such lease term upon the sale of the property to a purchaser who will<br />
occupy the property as a primary residence, subject to the 90-days notice. In the<br />
case of a tenant without a lease or if there is a lease terminable <strong>at</strong>-will, the<br />
tenant must be given the 90-day termin<strong>at</strong>ion notice. The <strong>Act</strong> also includes a<br />
provision st<strong>at</strong>ing th<strong>at</strong> any St<strong>at</strong>e or local law providing for longer time periods or<br />
other additional protections for tenants shall not be affected by the <strong>Act</strong>.<br />
The <strong>Act</strong> raises several unanswered questions and issues:<br />
1) The <strong>Act</strong> may apply to all foreclosures, and not only to loan foreclosures.<br />
Accordingly, lien foreclosures (such as a condominium or homeowner’s<br />
associ<strong>at</strong>ion liens) may trigger the <strong>Act</strong>’s notice requirements.<br />
2) The <strong>Act</strong> may prevent the Foreclosing Party from termin<strong>at</strong>ing a lease due to<br />
tenant’s default.<br />
3) Title companies insuring title based on a foreclosure sale will likely require an<br />
exception for the rights of tenants pursuant to the <strong>Act</strong>’s notice requirements.<br />
It is unclear whether title companies will be willing to delete this exception<br />
after the notice requirements have been met.<br />
In conclusion, the <strong>Protecting</strong> <strong>Tenants</strong> <strong>at</strong> <strong>Foreclosure</strong> <strong>Act</strong> severely affects the rights<br />
of all foreclosing lenders, including lenders foreclosing on condominium projects.<br />
_____<br />
This GT Alert was prepared by David Layman, Gil Rudolph and Dan<br />
Wurtenberger. Questions about this inform<strong>at</strong>ion can be directed to:<br />
• David Layman — 561.650.7990 (laymand@gtlaw.com)<br />
• Gil Rudolph — 602.445.8206 (rudolphg@gtlaw.com)<br />
• Dan Wurtenberger — 561.650.7936 (wurtenbergerd@gtlaw.com)<br />
• Or your <strong>Greenberg</strong> <strong>Traurig</strong> <strong>at</strong>torney<br />
GREENBERG TRAURIG, <strong>LLP</strong> • ATTORNEYS AT LAW • WWW.GTLAW.COM - 1
Real Est<strong>at</strong>e Alert<br />
JUNE 2009<br />
Albany<br />
518.689.1400<br />
Amsterdam<br />
+ 31 20 301 7300<br />
Atlanta<br />
678.553.2100<br />
Austin<br />
512.320.7200<br />
Boston<br />
617.310.6000<br />
Chicago<br />
312.456.8400<br />
Dallas<br />
214.665.3600<br />
Delaware<br />
302.661.7000<br />
Denver<br />
303.572.6500<br />
Fort Lauderdale<br />
954.765.0500<br />
Houston<br />
713.374.3500<br />
Las Vegas<br />
702.792.3773<br />
Los Angeles<br />
310.586.7700<br />
Miami<br />
305.579.0500<br />
New Jersey<br />
973.360.7900<br />
New York<br />
212.801.9200<br />
Orange County<br />
949.732.6500<br />
Orlando<br />
407.420.1000<br />
Palm Beach County North<br />
561.650.7900<br />
Palm Beach County South<br />
561.955.7600<br />
Philadelphia<br />
215.988.7800<br />
Phoenix<br />
602.445.8000<br />
Sacramento<br />
916.442.1111<br />
Shanghai<br />
+86 21 6391 6633<br />
Silicon Valley<br />
650.328.8500<br />
Tallahassee<br />
850.222.6891<br />
Tampa<br />
813.318.5700<br />
Tokyo<br />
+81 3 4550 1891<br />
Tysons Corner<br />
703.749.1300<br />
Washington, D.C.<br />
202.331.3100<br />
White Plains<br />
914.286.2900<br />
Zurich<br />
+ 41 44 224 22 44<br />
This <strong>Greenberg</strong> <strong>Traurig</strong> Alert is issued for inform<strong>at</strong>ional purposes only and is not intended to be construed or used as general legal advice. Please contact the<br />
author(s) or your <strong>Greenberg</strong> <strong>Traurig</strong> contact if you have questions regarding the currency of this inform<strong>at</strong>ion. The hiring of a lawyer is an important decision.<br />
Before you decide, ask for written inform<strong>at</strong>ion about the lawyer’s legal qualific<strong>at</strong>ions and experience. <strong>Greenberg</strong> <strong>Traurig</strong> is a trade name of <strong>Greenberg</strong> <strong>Traurig</strong>,<br />
<strong>LLP</strong> and <strong>Greenberg</strong> <strong>Traurig</strong>, P.A. ©2009 <strong>Greenberg</strong> <strong>Traurig</strong>, <strong>LLP</strong>. All rights reserved.<br />
GREENBERG TRAURIG, <strong>LLP</strong> • ATTORNEYS AT LAW • WWW.GTLAW.COM - 2
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