The Protecting Tenants in Foreclosure Act is Back

In 2009, during the peak of the financial crisis, the US Congress enacted the Protecting Tenants at Foreclosure Act (“PTFA”), which required the party taking title at a foreclosure sale to provide bona fide tenants with a notice 90 days before requiring them to vacate the property and allowed the tenants with leases to occupy the property until the end of the lease term.

PTFA expired on December 31, 2014, thereby leaving tenants helpless unless there was a state law or local ordinance. The Florida legislature passed its own version of the Protection Tenants at Foreclosure act as set forth in s. 83.561, Florida Statutes. Section 83.561, Florida Statutes does not provide tenants with the same protection as PTFA, rather it provides tenants with a 30-day notice.

On May 24, 2018 President Trump signed into law a permanent extension of PTFA. Tenants living in foreclosed homes now have permanent protection under the federal law. PTFA will remain the same which provides for the 90-day notice with the same requirements, such as requiring a bona fide lease or tenancy with a tenant that was neither the mortgagor, the spouse, parent or child of the mortgagor; the lease is an arm’s length transaction, and rent at fair market value. If the property was purchased by someone who will occupy the property, then the purchaser may terminate the lease on 90 days-notice even if the tenant has a lease that extends beyond the 90 days after foreclosure.

PTFA specifically provides that it does not affect any state or local law that provides longer time periods or other additional protections for tenants. Since Florida’s version of the PTFA is less restrictive, purchasers taking title to properties pursuant to a foreclosure are required to adhere to the federal standards and provide 90-day notice to all tenants.