Federal Eviction Law Protections Extended for Two More Years

Federal Eviction Law Protections

A little known result of the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Act”) (Pub. L. 111-203, H.R. 4173, Section 14), was to extend and clarify the Protecting Tenants at Foreclosure Act (“PTFA Act”), Pub. Law 11-22, 123 Stat. 1632, 1660 (2009).

In essence, the PFTA increased the eviction notice period for tenants to 90 days, and allowed any bona fide tenant, under a lease entered into prior to the notice of foreclosure, to occupy the property for the remaining term of the lease. Buried in the Act, are provisions which affected the PFTA, including:

  • The Act extended the PFTA for two more years i.e. until December 31, 2014.
  • The Act “clarified” the date that a lease could be entered into and still be deemed valid under PFTA. Under PFTA the start date for determining whether a lease was valid was determined by examining whether the lease was entered into prior to the “notice of foreclosure”. The Act now provides that the notice of foreclosure is the date complete title to a property is transferred, as a result of a court order or the provisions of a mortgage or deed of trust.

These provisions will effect your eviction rights if you foreclose on a covered loan. Count on seeing more suspect lease agreements that are targeted to allow continuing tenant rights after foreclosure. These changes, in conjunction with changes in the law imposing liability on lenders to maintain certain properties after foreclosing, highlight the need for Lenders to ensure that they inspect properties prior to foreclosure to determine exactly what post-foreclosure obligations they will be incurring.

Please call or email Scheer Law Group, LLP if you have any questions.

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