Mortgage Default Information

Renters of Foreclosed Properties in Connecticut Have Rights

But many renters remain unaware of new law

Homeowners aren't the only ones affected by the foreclosure crisis. Renters also face problems, not of their own making, when their landlord defaults.

Thanks to legislation signed into law in Connecticut last year, renters have new rights and can't be immediately evicted. Before the new law, renters were often the last to know their home was in foreclosure. Sometimes they continued paying rent to their former landlord, who pocketed the money even though they no longer owned the property.

Before the "Protecting Tenants at Foreclosure Act of 2009" took effect, most leases were nullified if the property went to foreclosure, meaning the occupants of the house had no rights. Under the new law, tenants may stay in a foreclosed home until their lease expires. If they are on a month to month contract, they are entitled to 90 days notice before having to move.

Unfortunately many tenants are still unaware of their new rights, and in Connecticut, Attorney General Richard Blumenthal reports bankers and realtors are taking advantage of that lack of awareness.

Blumenthal says his office has received complaints from tenants hastily and illegally forced out of rental homes after their landlords' properties were foreclosed. Evicted tenants are typically current on their rent, but face eviction because of their landlord's financial troubles.

In many cases, he says real estate agents have pressured tenants to leave, without informing them of their rights under the new federal law. Some banks begin eviction procedures immediately upon completing foreclosure, despite the consequences for tenants and a federal law that requires a 90-day delay.

"Tenants have rights to remain until their lease ends -- rights that deserve respect and enforcement," Blumenthal said. "We're warning banks and real estate interests: foreclosure is no excuse for illegal eviction. These cease-and-desist letters send a message to powerful property owners that foreclosure gives them no right to engage in automatic eviction."

Hasty evictions serve no one's interests, Blumenthal says. Vacant properties quickly become rundown and damaged by vandals, decreasing the value of foreclosed properties and surrounding properties.

"Tenants in foreclosed properties -- victims of their landlord's financial failures -- deserve to be treated fairly and lawfully when forced to find a new home," Blumenthal said. Law firms, Realtors and lenders have moral and legal obligations to provide fair notice and time for tenants to find alternative housing after foreclosures. We are alerting law firms, lenders and real estate companies that they must follow this law or face legal action.


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