19-Oct-2009

Under this Act, a tenant’s lease survives foreclosure and the tenant is allowed to remain on the property for the remainder of the lease. There are also other stipulations in addition to the immediate successor in interest not purchasing the property for their primary occupancy.

For purposes of this Act, a lease or tenancy shall only be considered bona fide (“legitimate”) if..

(1) The mortgagor (debtor in foreclosure) or the child, spouse, or parent of the mortgagor under the contract is not the tenant.
(2) The lease or tenancy was the result of an arms- length transaction; and
(3) The lease or tenancy requires the receipt of rent that is not substantially less than fair market rent for the property or the unit’s rent is reduced or subsidized due to a Federal, State or local subsidy.


Stay tuned next week for more information regarding this Act.