Sec. 4. Protecting tenants at foreclosure
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/bill/115/hr/3015/ih/section-4A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
In the case of any foreclosure on a federally-related mortgage loan or on any dwelling or residential real property after the date of enactment of this section, any immediate successor in interest in such property pursuant to the foreclosure shall assume such interest subject to— the provision, by such successor in interest of a notice to vacate to any bona fide tenant at least 90 days before the effective date of such notice; and the rights of any bona fide tenant, as of the date of such notice of foreclosure— under any bona fide lease entered into before the notice of foreclosure to occupy the premises until the end of the remaining term of the lease, except that a successor in interest may terminate a lease effective on the date of sale of the unit to a purchaser who will occupy the unit as a primary residence, subject to the receipt by the tenant of the 90-day notice under subparagraph (A); or without a lease or with a lease terminable at will under State law, subject to the receipt by the tenant of the 90-day notice under subparagraph (A), except that nothing under this subsection shall affect the requirements for termination of any Federal- or State-subsidized tenancy or of any State or local law that provides longer time periods or other additional protections for tenants.
For purposes of this subsection, a lease or tenancy shall be considered bona fide only if— the mortgagor or the child, spouse, or parent of the mortgagor under the contract is not the tenant; the lease or tenancy was the result of an arms-length transaction; and 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. For purposes of this subsection, the term federally-related mortgage loan has the same meaning as in section 3 of the Real Estate Settlement Procedures Act of 1974 ( 12 U.S.C. 2602 ).
Section 8(o)(7) of the United States Housing Act of 1937 ( 42 U.S.C. 1437f(o)(7) ) is amended— by inserting before the semicolon in subparagraph
(C)the following: and in the case of an owner who is an immediate successor in interest pursuant to foreclosure during the term of the lease vacating the property prior to sale shall not constitute other good cause, except that the owner may terminate the tenancy effective on the date of transfer of the unit to the owner if the owner— will occupy the unit as a primary residence; and has provided the tenant a notice to vacate at least 90 days before the effective date of such notice. ; and by inserting at the end of subparagraph
(F)the following: In the case of any foreclosure on any federally-related mortgage loan (as that term is defined in section 3 of the Real Estate Settlement Procedures Act of 1974 ( . 12 U.S.C. 2602 )) or on any residential real property in which a recipient of assistance under this subsection resides, the immediate successor in interest in such property pursuant to the foreclosure shall assume such interest subject to the lease between the prior owner and the tenant and to the housing assistance payments contract between the prior owner and the public housing agency for the occupied unit, except that this provision and the provisions related to foreclosure in subparagraph
(C)shall not shall not affect any State or local law that provides longer time periods or other additional protections for tenants. The Secretary of Housing and Urban Development shall, not later than the end of the 12-month period beginning on the date of the enactment of this Act, issue regulations to carry out this section and the amendments made by this section, and the Secretary shall provide that such regulations take effect not later than the end of the 6-month period beginning on the date the regulations are issued.
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