BUYING A FORECLOSURE PROPERTY WITH AN EXISTING TENANT

If you pick up properties at a foreclosure sale or buy REO’s, you are bound to end up with a property that is Tenant occupied.  Being familiar with the Protecting Tenants at Foreclosure Act of 2009 (PTFA), will come in handy if you want to evict the tenant.  (For a copy of the PTFA click here)

PTFA protects tenants from eviction due to a foreclosure on the property that they occupy. These provisions took effect on May 20, 2009, and originally were scheduled to expire on December 31, 2012. However, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) changed the expiration date to December 31, 2014. 

The PTFA requires a foreclosure buyer to give a tenant with no lease a 90 day notice to vacate before filing an eviction. If you give a tenant notice that is less than 90 days, you will be in violation of PTFA. This means if you jump the gun and start your eviction too early, the court will dismiss your eviction action and most likely award fees and costs to the tenant’s attorney.

PTFA applies in the case of any foreclosure on a “federally related mortgage loan” OR on any dwelling OR residential real property.

However, if the Tenant has a legally binding, bona fide lease, that was entered into before notice of foreclosure, the 90 day rule does not apply and the tenant must be permitted to stay in the residence until the end of their lease term, with the exception of the purchaser of a foreclosed property who will occupy the property as their primary residence. In that case the new owner does not have to honor the lease. However, even in that scenario the tenant must still receive 90 days notice before they may be evicted.

When it comes to managing your single, multi-family or commercial properties, or second homes, rest easy – Octazon Management has got you covered and can protect your assets and take away your property management headaches and distractions through our full-service or back office property management services.

When providing management services to Realtors, Octazon will NOT provide the leasing, rentals or sales– so you never have to worry about losing control of your relationship with the owner. 

With Octazon, we bring order to residential & commercial property ownership.  Call us 888-324-9528 or email us at info@octazon.com . Check us out @ www.octazon.com