Blumenthal Introduces the Permanently Protecting Tenants at Foreclosure Act of 2015

(Hartford, CT) – U.S. Senator Richard Blumenthal (D-Conn.) led housing advocates today in announcing legislation to permanently extend critical protections for renters living in foreclosed properties.

The Protecting Tenants at Foreclosure Act, first passed in 2009, ensured that most tenants in foreclosed homes could stay in their homes for the remainder of their lease, or for at least 90 days post-foreclosure. But Congress allowed the measure to expire on December 31, 2014, leaving renters with limited legal recourse in the event of a foreclosure. Blumenthal is now seeking to permanently extend PTFA’s vital protections.

Blumenthal introduced the Permanently Protecting Tenants at Foreclosure Act of 2015 in the Senate earlier this month, joined by Rep. Keith Ellison (D-MN) who introduced the bill in the House. The bill ensures expired federal protections for renters living in foreclosed properties are renewed.   

Blumenthal said: "Families who pay their rent and play by the rules should not be evicted simply because their landlord fails to pay his mortgage. This measure is necessary to protect tenants from eviction when their landlord defaults. The Act that protected them previously expired in 2014, so tenants may now be evicted, inexplicably and inexcusably when the building owner faces foreclosure. As a matter of common sense and basic fairness, families should be spared life on the street when landlords shirk their obligations."

Ellison said: “When a building owner falls into foreclosure, people who live in the property may be forced out—even if they’ve paid their rent in full and on time. It’s wrong that families face homelessness because the owner of the property where they live failed to make payments on time. The Permanently Protecting Tenants in Foreclosure Act ensures families have the time they need to find new housing.”

Amy Eppler-Epstein and Amy Marx, staff attorneys for New Haven Legal Assistance Association said: “The federal law, Protecting Tenants at Foreclosure Act, has been tremendously important in helping to stabilize communities that faced huge numbers of foreclosures of rental properties.  The law gave tenants stability, by allowing them to live out their leases; requiring banks to honor tenants’ Section 8 contracts; and giving tenants at least 90 days’ notice before the start of an eviction.  This enabled many tenants to keep their rental housing after their landlord lost the property to foreclosure; or at a minimum, get enough time to be able to move in a planned and orderly manner.  And the stability of the tenants has in turn improved the stability of entire neighborhoods, by cutting down on the numbers of vacant, foreclosed properties. We are so glad that Senator Blumenthal continues his efforts to try to re-instate the PTFA as the law of our nation, and tries to make it a permanent law as well.  We appreciate all his efforts on this issue when he was Attorney General in CT, and hope that he will have success this time around in garnering the support needed in Congress to get this law passed.”

National Housing Law Project Executive Director Marcia Rosen said: “The PTFA provides critical protection to innocent renter families whose homes have been foreclosed.  PTFA is an important tool, especially now, given the significant national shortage of rental housing.”

National Law Center on Homelessness and Poverty Executive Director Maria Foscarinis said: "Without federal protections in place, many renters in foreclosed properties are vulnerable to summary eviction and homelessness. In nearly half the states, these renters can be evicted with five days' notice or less, through no fault of their own.”

Sheila Crowley, President and CEO for National Low Income Housing Coalition said: “We are grateful to Senator Blumenthal and Representative Ellison for introducing this crtical legislation to protect renters when their landlords’ properties go into foreclosure. We hope Congress acts swiftly to enact these protections.”

While much of the response to the foreclosure crisis has focused on homeowners, 27 percent of properties and 40 percent of the units in foreclosure are estimated to be renter-occupied. These renters often have no idea that their landlord has fallen behind on mortgage payments, and usually have continued to pay their rent even as their landlord has failed to pay the mortgage. Prior to the passage of the Protecting Tenants at Foreclosure Act (PTFA) in May 2009, tenants were often required to move with as little as a few days-notice. The law ensured that most tenants can stay in their home for the remainder of their lease or for at least 90 days post-foreclosure. But Congress did not extend the PTFA, and it expired on December 31, 2014. The Permanently Protecting Tenants at Foreclosure Act of 2015 makes the law permanent.

The Permanently Protecting Tenants at Foreclosure Act of 2015 has been endorsed by the following organizations: The Consortium for Citizens with Disabilities Housing Taskforce, The Leadership Conference on Civil and Human Rights, Mercy Housing, National Alliance to End Homelessness, National Association for the Education of Homeless Children & Youth, National Center on Housing and Child Welfare, National Health Care for the Homeless Council, National Housing Conference, National Housing Law Project, National Law Center on Homelessness and Poverty, and the National Low Income Housing Coalition.

The Permanently Protecting Tenants at Foreclosure Act of 2015 is co-sponsored by:  Senators Reed, Warren, Stabenow, Franken and Whitehouse. It is cosponsored in the House by Reps. G.K. Butterfield, Michael Capuano, Katherine Clark, Elijah Cummings, Al Green, Raul Grijalva, Hank Johnson, Alcee L. Hastings, Rubén Hinojosa, Marci Kaptur, Jim Langevin, Barbara Lee, John Lewis, Stephen Lynch, Carolyn B. Maloney, James P. McGovern, Gregory Meeks, Gwen Moore, Eleanor Holmes Norton, Mark Pocan, Louise Slaughter, Adam Smith, Mark Takano and Maxine Waters.