Thursday, August 15, 2013

Effect of Foreclosure on Preexisting Tenancy - The Pesky Details

I've written about this before, sort of:

PTFA does NOT expire December 31, 2012

 Conundrums, Foreclosure and Tenant Security Deposits Under URLTA and PTFA

Generally, the Federal Protecting Tenants at Foreclosure Act of 2009, as amended, gives rights to innocent bona fide tenants caught up in a foreclosure of the landlord's rental property.

The interesting language of PFTA is this:

".... under any bona fide lease entered into before the notice of foreclosure .... "

  12 USC § 5220 note. Seriously, it's in the damn notes to that Code section

One might wonder what "before notice of foreclosure" means, and rightly so. In 2010 Congress amended the 2009 law to provide:
“For purposes of this section, the date of a notice of foreclosure shall be deemed to be the date on which complete title to a property is transferred to a successor entity or person as a result of an order of a court or pursuant to provisions in a mortgage, deed of trust, or security deed.”

12 USC § 5220 same damn note.
Thus, before "notice of foreclosure" means before "complete title to a property is transferred to a successor."

See also: A New Amendment to the “Protecting Tenants in Foreclosure Act” by William A. Robinson, Esq. Colorado

This is only one of many reasons why the suicide rate among lawyers is so high.

The obvious next question is:  When does transfer of complete title to a successor after foreclosure happen in Kentucky law? That must wait for another day.