In February of this year, I wrote an article addressing the plight of renters in the Las Vegas valley. The Las Vegas Sun had run an article detailing how many renters were facing the need to immediately vacate their homes, which had gone into foreclosure without their knowledge. (Click here to read my article.) In most cases, the renters had no idea that the owners of the property were in trouble until the Sheriff arrived on their doorstep to serve eviction papers.
A new law, passed May 20th and entitled the “Helping Families Save Their Homes Act of 2009”, provides safeguards for renters in the event that an owner allows a property to enter foreclosure. This protection comes in two forms. First, if the renters have a lease, the new owners of the property must honor the lease, allowing renters to stay in the property until the end of the term provided they remain in good standing. The only case in which this statute does not apply is in states where state law allows leases to be terminated at any time upon notice. Even in that case, the new owner of the property must intend to occupy the property as a primary residence in order to evict the tenants before the end of the lease. The second safeguard extends to renters who are on a month-to-month agreement. In this case, the new owner of the property (whether it be a bank or a private individual) must provide 90 days written notice to the tenants in order for them to vacate the property.
Many states already have laws protecting tenants in the case of foreclosure. In those states, the new Federal law will still supercede the state law, unless the protection afforded to the tenants under the state law is greater.
Of course there are conditions that must be met in order for the Helping Families Act to apply. The most notable are:
1. The tenants must have a written contract to rent or lease the property
2. The lease must be a result of an “arms length transaction.”
3. The rent must not be substantially less than current fair market rent for the property.
All things considered, I believe that this law represents a fair and equitable solution to the unfair situation in which many renters have found themselves since the foreclosure boom began.
If you are a renter, and you want to know if your landlords are current on their mortgage, you can often find that information on the County Assessor’s website. In the case of Las Vegas residents, the site would be www.accessclarkcounty.com/assessor. Once you are on the site, click on “record searches” then “addresses.” You will need to enter the full property address as requested. Once you have done this, you will receive a parcel number. Jot this parcel number down and then visit this site: www.accessclarkcounty.com/depts/recorder. Click on “search records” and then click on the “advanced search” tab. You will need to enter the parcel number (without any dashes) and hit “search.” The search will show you the name of the registered owner of the property and whether or not there are any documents filed against the property, such as a notice of default or a notice of sale.