Protecting Tenants at Foreclosure Act of 2009 Pub. L. No. 111-22, §§ 701-704 (2009)
Congress passed the Protecting Tenants at Foreclosure Act (Title VII of S. 896, Pub. L. No. 111-22, §§701 – 704 (2009). This law immediately went into effect when President Obama signed it on May 20, 2009, and it applies to all pending and future residential foreclosures.

Tenants With an Unexpired Lease Term.
The law requires a new owner acquiring property at a foreclosure sale, including plaintiffs acquiring the property, to honor all terms and conditions of existing leases. This means the tenant can remain in the property for the time remaining in the lease term. However, if the new owner wants to live in the property, then the new owner may terminate the tenancy by giving the tenant at least 90 days written notice to vacate.

Tenants Without a Lease.
Tenants without a lease: In the case of tenants without a current lease, usually month-to-month tenants, the new owner must provide the tenant with a minimum 90 day written notice before terminating tenancy. This also applies when there is an unexpired written lease which has less than 90 days remaining.

Most Significantly, Residential Tenancies Now Survive The Foreclosure Process.
The implication of this change is that a tenant’s right to continued possession of the property is now outside the scope of the foreclosure action, and therefore the foreclosure court should no longer issue writ of possession when a bona fide tenant is in possession of the property. If the new owner after foreclosure desires to terminate the surviving tenancy, he/she must give the tenant 90 days written notice to vacate. Any notice sent prior to the certificate of title does not comply with the new statute and has no legal effect and a new notice must give a new 90 day written notice to vacate. These changes apply only when there is a “bona fide tenant” in the property, as defined in the new statute