Tenant Protections in S. 896 to Become Law President’s Signature Expected Today


May 20, 2009
Tenant Protections in S. 896 to Become Law

More Info

President’s Signature Expected Today
 
Yesterday important protections for tenants living in foreclosed properties passed through Congress in a bill expected to be signed by the President later today.
 
Thank you for all your advocacy and support to make sure innocent renters are offered protection against losing their homes without reasonable notice.
 
What Happened
 
On May 19 the House amended and passed S. 896 and then the Senate passed the revised bill, which it had originally passed on May 6.
 
The bill contains key renter protections, advocated for by NLIHC and other organizations:
 
  • 90-day pre-eviction notice to tenants whose homes have gone into foreclosure.
  • The rights of tenants to remain in their homes for the terms of their leases. (However, if the new owner will live in the home, leases can be terminated subject to the 90 day notice.)
  • Tenants with vouchers able to remain with both their lease and rental assistance payments intact, subject to the rights of a purchaser who wants to occupy the home after 90 days notice.
 
The renter protection provisions go into effect as soon as the bill is signed by the President and expire at the end of 2012. Currently, in most states, renters get little or no notice to vacate their homes upon their landlords' foreclosures.  The new federal law will not preempt state laws that provide a greater level of renter protections at foreclosure.
 
What's Unresolved
 
Last week we informed you that H.R. 1728 would be sent to the Senate and S. 896 would be sent to the House for the two parties to agree upon the many provisions of each bill, some of which include protections for tenants in foreclosed properties.
 
H.R. 1728, Mortgage Reform and Anti-Predatory Lending Act which was not a companion bill to S. 896, has yet to be taken up by the Senate. That bill, which passed the House on May 7, contained the same tenant protections as S. 896 and also included the following amendments not adopted in S. 896:  
 
  • Landlords would be required to notify prospective tenants as well as existing tenants that their building is in "default" (landlord is late in making payments on the mortgage) or foreclosure. Sponsored by Rep. Bob Filner (D-CA).
  • Tenants would only get 30-day eviction notice if the defaulting owner rented the home in violation of the mortgage and if the new owner will live in it. Sponsored by Rep. Ed Perlmutter (D-CO).
  • Treasury Department would be required to establish a program to protect tenants in multifamily properties at risk of default or disinvestment, or already in foreclosure. The program would stabilize properties by: providing financing based on the building's existing rents and operating reserve needs; maintaining any federal, state, or local subsidies; and, facilitating sale of the property to responsible new owners (such as nonprofits) when necessary. Sponsored by Rep. Nydia Velazquez.
 
These provisions could still become law if the Senate chooses to take up and pass H.R. 1728.  NLIHC will alert you if further action is needed.
 
Thanks again for your advocacy to help protect renters facing foreclosure.
 
If you have any questions, please contact outreach@nlihc.org, or 202.662.1530.