Renters in a foreclosed home S.896 interpretation

[yiayia10902]

What is the name of your state (only U.S. law)? Ohio
I have a three year lease on a home that the landlord and his wife stopped paying the mortgage on. He is in federal prison (taxes) and we were paying directly to a bank account that his wife was to continue paying the mortgage, but obviously didn't. Sheriff's sale was last week. Bank bought back the house. We signed the lease before foreclosure proceedings were enacted. Lease ends 2/2011. Only way to contact bank is via their website "contact us" link. We have not heard back yet.
I just want to know if I am interpreting the new law correctly: according to S.896 Title VII, section 702(a)(2)(A) it appears that I am entitled to remain in the house through the end of my lease, because the house was not purchased by someone using the home as their primary residence.
I have "contacted" the bank and asked what to do, where we can send our rental payment, etc.
Am I reading this correctly? Do I need to get a lawyer? What type of lawyer? (I don't trust my last lawyer, he takes money and does nothing. My husband insists on going to him because he is the son of my (deceased) father-in-law's law partner)

[DeenaCA]

Here's the definition of "bona fide tenancy" from the Protecting Tenants at Foreclosure Act (Title VII, PL 111-22):

Bona Fide Lease or Tenancy- For purposes of this section, a lease or tenancy shall be considered bona fide only if--
(1) the mortgagor 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.

If your tenancy meets this definition, then you're correct in that the law protects you for the remainder of the lease term. For more information, see the Renters in Foreclosure Toolkit at [url=http://www.nlihc.org/template/page.cfm?id=227]NLIHC: Renters in Foreclosure Toolkit[/url].

You shouldn't need a lawyer for this. You might want to send the bank a certified letter offering to pay the rent, or a letter by Fed-Ex/UPS, so that you get proof of delivery.

[yiayia10902]

Thank you very much for your quick response.

Should I just send the certified letter to their general address? I don't have a name or department or anything; just their New York address from their website.

[iflyjetzzz]

Their general address will likely work. Be sure to include as detailed a description of the property as possible - not only street address but also legal description (lot/block/etc).
Or better yet, if you're able to get a copy of the foreclosure, I'd include that with the letter. For me, I've gone to my county clerk's website and logged on to their electronic database. I'm in Bexar County (San Antonio), TX. Once logged on, I did a search of land records. By putting in the legal description of the property, I was able to see all records filed ... deed, partial release, lien, etc. I found the new deed that was filed after foreclosure. It lists the buyer, which is a Goldman Sachs (GS) trust. Basically, my owner's loan was subprime crap (10% interest rate) that was sold off to GS. GS packaged a bunch of these crap mortgages together and then subdivided them into tranches. They sold the tranches off to mutual fund managers and pension managers.


Here are a few words of caution for you:
1) The bank may not want you as a tenant. They may try to persuade you to leave; don't leave unless you want to.
2)Your lease is no longer valid; it has ended due to the foreclosure. That means you need to negotiate a new lease with the bank. Read it closely and DO NOT sign anything that you don't like. Make changes to it to suit your needs.
3) In accordance with the Protecting Tenants at Foreclosure Act, you can live in the house until the lease ends because an individual who was planning on living in the house did not buy it. That's something to think about when negotiating a new lease. I intend to have the following included in my new lease:
QUIET ENJOYMENT: Owner agrees that if Tenant pays the rents and keeps and performs the covenants of this Agreement on the part of Tenant to be kept and performed, Tenant will peaceably and quietly hold the premises during the term hereof without any hindrance, ejection or molestation by Owner or any person lawfully claiming under Owner. Owner cannot list or sell the premises as long as Tenant remains in the premises. Owner cannot show the premises to prospective buyers.
4) Do not pay rent until a new lease has been established. Escrow all rent.
5) Everything's negotiable in the new lease. If the bank is hostile and has made it clear that they're going to get you out as soon as possible, they're probably not going to be too responsive to anything that needs to be repaired. For this, I plan on adding the following:
The entire cost of repairs and maintenance shall be paid by Owner. Tenant will contract for any repairs and maintenance. Tenant will pay for repairs and maintenance and submit the bill to Owner. Tenant will subtract repair and maintenance costs from subsequent monthly rent. In the event that repair costs exceed $800, Owner will immediately pay Tenant all amounts in excess of $800.
6) If the bank's hostile, do not rent for the same price as previous. That's a negative change from your previous situation. In corporate legalese (not applicable here), I'd consider it to be a Material Adverse Change. If that's the case, you will not be able to renew your lease, so you need to lower your rent by, say, $100/month to account for this; bank that money for the move that you'll be making 2/2011.
7) Read the Protecting Tenants at Foreclosure Act word by word. If you don't understand something, make sure that you get clarification. It is a very powerful protection for people in your (and my) situation.


The house that I'm renting was foreclosed on 5 Oct and the lawyer wants to play hardball. I'm going to slow roll him and look forward to any court appearances.

Finally, I just started looking at this board tonight. The only decent advice that I've read on multiple threads has been from DeenaCA. Thanks, DeenaCA.