Illinois Governor Pat Quinn signed a law August 21 that protects renters from being evicted from foreclosed property before their leases expire.
To be clear, this state law, which goes into effect at the end of the year, mostly restates what was laid out in the Protecting Tenants at Foreclosure Act, signed into federal law in 2009. The federal law, however, is set to expire at the end of 2014, after being extended once already from its original 2012 deadline by the Dodd-Frank Act. The Illinois law has no expiration date, giving renters protection that is immune from potential Washington gridlock.
This law, as well as the previous federal law, allows renters with long term leases of a year or more to finish their lease even if the property has been foreclosed, and requires a 90-day notice before the end of that lease to notify the tenants if they will not be able to renew. Tenants on month-to-month leases, which includes oral agreements, must receive a 90-day notice to leave.
According to a 2012 study by the National Low Income Housing Coalition, 40 percent of families affected by foreclosure are renters. These are people who had no control over the financial status of their home, and likely didn’t know much about the fact that the property in which they were living in was in foreclosure. For families like this, the aftermath of foreclosure can be even more devastating than for the owner. Even if they are aware of the protections defined in the Protecting Tenants at Foreclosure Act, tenants can find themselves without a home very quickly.
As with many federal programs set up in the wake of the financial crisis, the PTFA does a lot less than it says it does. The act doesn’t give any federal agency the responsibility or authority to enforce these tenant protections. If the newly signed state law does anything, it will hopefully be more enforceable and remind tenants of rights they may not have known about. Sometimes, it takes a good attorney – or a good advocacy group – to protect the tenant’s right in eviction court. But the tenant needs to know to ask for help and not simply accept being evicted because of a foreclosure.