New Protections for Renters in Foreclosure
As the foreclosure crisis has unfolded throughout the country, it has become evident that renters – not just homeowners - have been victims of this crisis. Indeed, the National Low-Income Housing Coalition reports that renters make up about 40% of the families facing the loss of their housing due to foreclosure and more than one in every five foreclosed properties is a rental property.
Residents in foreclosed properties have been caught unaware that their home is being foreclosed and have scrambled with very little notice to find safe replacement housing. Rental properties in foreclosure fall into disrepair – even when there are still families living there. Advocates throughout the country, grappling with the effect of the economic downturn, have called for increased protections for renters affected by foreclosure. Legislators have listened.
On May 20, 2009, President Obama signed into law the Protecting Tenants at Foreclosure Act of 2009, part of the Helping Families Save Their Homes Act of 2009 (Pub. L. 111-22). This law, which sunsets in 2012, ensures that renters in foreclosed properties receive at least 90 days notice before they have to move, and that tenants who start a lease term before the notice of foreclosure may continue to live in their homes until the lease expires.
In Illinois, Representative Will Burns and Senator Jacqueline Collins have championed a bill, HB 3863, which would provide much needed protections for Illinois renters living in foreclosed properties. Currently, Illinois renters are not entitled to notice when control or ownership of the property in which they live changes as a result of foreclosure. Consequently, they frequently do not know who owns the property, where to pay rent, or who to call if repairs are necessary. Among other protections, HB 3863 would provide renters with essential information regarding their homes.
The basic provisions of HB 3863 include:
· During the foreclosure case, if a receiver (or mortgagee in possession) is appointed to operate and manage the property while the foreclosure case is pending, the receiver must:
a) Make a good faith effort to identify residents of the property; and
b) Notify residents of his or her appointment, inform residents that the property is the subject of a foreclosure action, and provide contact information for resident concerns and repair requests.
c) Post notices with contact information at the property.
· After the foreclosure is complete, the lender/new owner must:
a) Make a good faith effort to identify residents of the property; and
b) Notify residents that the lender/new owner has acquired the property, inform residents that the property has been the subject of foreclosure, and provide contact information for resident concerns and repair requests.
c) Post notices with contact information at the property.
· Tenants evicted as a part of the foreclosure case are granted a minimum of 30 days to move after the eviction hearing.
HB 3863 has been sent to the Governor’s desk. We implore Governor Quinn to sign it to protect the hidden victims of the foreclosure crisis.
Call 217-782-0244to encourage Governor Quinn to sign HB 3863.
