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Your Rights as a Tenant in a Foreclosure Matter


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3/15/2015
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     Across the nation, the rights of tenants have been waived after the expiration of the federal Protecting Tenants at Foreclosure Act. Under the PTFA, the new owner of the foreclosed property was required to give the tenant a 90-day notice to leave. If the written lease was unexpired, the tenant could be permitted to stay at the property unless the new owner was moving in. Despite the expiration of this law in December 2014, tenants in a few states and cities, including New Jersey and NYC, can rest assured that their rights will still be protected if their landlord fails to make mortgage payments.

     These tenant rights have been sustained due to additional legislation, specifically the “Just Cause” statute. This law prevents lenders from evicting tenants based solely upon the fact that the property is in foreclosure. It is important to note that this law protects tenants under “bona fide” leases. To examine the requirements for a lease to be considered “bona fide” please see http://www.occ.gov/publications/publications-by-type/comptrollers-handbook/ptfa.pdf .

     Now, this statute certainly doesn’t mean that as a tenant, one is relieved of their obligation to pay rent or perform one's other contractual duties under the lease. Failure to uphold one’s duties as the tenant, including payment of rent, can still result in a termination of the lease. There are numerous “just causes” in which an owner can evict a tenant, all of which are listed within N.J. Stat. §2A:187-61.1, otherwise known as the Anti-Eviction Act. These legal grounds for eviction include the failure to pay rent, disorderly conduct, damage to the property, violation of the landlord’s regulations, a breach of the lease agreement, etc… N.J. Stat. §2A:187-61.1 (a-e).  The essence of this statute holds true to the belief that a landlord needs proper justification and does not have the inherent ability to evict a tenant for no particular reason.

     In the appeal, Chase Manhattan Bank v. Josephson, 135 N.J. 209, 638 A.2d 1301, 1994 N.J. LEXIS 297 (N.J. 1994), the court ruled that the Anti-Eviction Act, in fact, protects tenants from eviction by foreclosing mortgagees. The mortgagee, Chase Manhattan Bank, attempted to evict the defendants on the basis of the mortgagors default on their mortgage. Defendants were able to argue that the property being foreclosed upon was not considered to be a “just cause,” and the trial level decision was reversed. The court held that in the amended Anti-Eviction Act, foreclosure was deemed an “improper reason” for eviction.  

     If you are currently renting in New Jersey, don’t be alarmed- the “Just Cause” statute enforces the idea that you, as a tenant, have certain rights which may not be taken away due to the property being foreclosed.   Foreclosure is deemed an “improper reason” for eviction.

     If you are currently renting and have found yourself stuck in a foreclosure matter due to the landlord, give us a call at (201)-529-8024 to set-up a free consultation—you may very well have a cause of action for wrongful eviction. At Fazzio Law Offices, we are staunch supporters of the belief that everyone should be made aware of their rights.

For further information:

http://www.nationalmortgagenews.com/news/distressed/tough-choices-for-servicers-after-tenant-foreclosure-law-expires-1044042-1.html

http://archive.lsnjlaw.org/english/placeilive/irentmyhome/tenantsrights/chapternine/

 

 

 

 

 



Category: Foreclosure Law

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