New Bill in House of Reps — Protecting Tenants in Foreclosure
House Resolution H.R. 7126, proposed in September by Congressman Bill Richardson, would put a few new restrictions on landlords buying or selling homes in foreclosure.
Among the provisions are:
- Landlord must notify the tenant that the property is going into foreclosure.
- Tenant retains right to serve out the rest of their lease, even if that extends beyond the foreclosure date.
- It also appears that the tenant cannot be evicted for a 6-month period beginning upon the foreclosure of the mortgage.
What does this mean for you? So far, it looks like Congress is putting reasonable restrictions on landlords who face foreclosure. If you're looking to buy up foreclosures to add to the number of rentals you own, this bill would require that you keep the existing tenants, which may not be such a bad thing.
Most foreclosed homes haven't gotten "tender love and care" in a while and need your cash for improvements. By retaining the old tenants but putting money into improvements, tenants see their homes getting better. This is a good way to retain good tenants. It's also a good justification to bump up the rents to market value if they leave.
So far, the bill is stuck in the House. But I'll keep an eye out.
