Investing Property

Federal Law to Protect Renters of Bank Foreclosure Property

Tenants of bank foreclosure property are the latest victims of this unabated foreclosure crisis. Since the foreclosure crisis started to emerge, many renters of foreclosed properties in Florida found themselves out in the street, with no time to look for alternative cheap places to live before they were evicted.

Now, renters of bank foreclosure property are given a breather with the passage of a law that allows them to remain in their rented homes until the lease expired, with additional three months to find themselves new places to live.

Industry experts hope that the law may provide the much needed solution to an argument over how and whether to notify tenants about foreclosures.

Steve Lehr, who represents lawyers for mortgage companies, delivers summonses to renters whose properties are in some kind of foreclosure proceedings. According to Lehr, summonses result in tenants' names being placed on court records of Alachua County. This process allowed renters to track the progress of the proceedings.

But early this year, the office of the Clerk of Court decided to stop summon issuance to renters of bank foreclosure property. Lehr said that because of this many renters would not be able to find out about the foreclosure proceedings until they will be notified of the eviction by new owners. And by that time, renters are left with little or no time to find new places to live.

Buddy Irby of Clerk of Court said that his office stopped issuing and delivering summonses on the order of his office's lawyer because court records show that renters are being sued. Aside from this, summonses also created volume of paperwork which is time consuming and expensive.

Irby pointed out that it would be easier and cost effective if lending institutions or their lawyers send letters informing renters of the foreclosures.

Meanwhile, Karl Klein, a real estate attorney, explained that banks want to terminate the lease that is why they add the renters as one of the parties in the repossession lawsuit.

Data from the National Low Income Housing Coalition showed that 40 percent of bank foreclosure property nationwide are rentals.

About the Author:

Joseph Smith has been educating buyers on the finer points of Bank Foreclosure Property at BankForeclosuresSale .com for over five years.