Protecting Your Rights Under the Protecting Tenants at Foreclosure Act

If you're renting a property that goes into foreclosure, you are not without rights. The federal Protecting Tenants at Foreclosure Act (PTFA) — originally enacted in 2009, expired in 2014, and permanently reinstated in 2018 — provides strong protections for tenants in foreclosed properties. Understanding these rights can mean the difference between a rushed, chaotic displacement and an orderly transition with adequate time to find new housing.

The PTFA's core protection: any immediate successor in interest who takes title to a foreclosed property (typically the lender or the buyer at the foreclosure sale) must provide bona fide tenants with at least 90 days' written notice before they can be required to vacate. This 90-day period applies regardless of what state law says — it's a federal floor, not a ceiling. States can provide additional protections, but they cannot provide less.

Even stronger: if you have a valid, bona fide lease entered into before the foreclosure, you generally have the right to stay through the end of your lease term — even if that's more than 90 days. The one exception: if the new owner intends to occupy the property as their primary residence, they can terminate the lease with 90 days' notice. But this exception only applies to purchasers who will actually live in the home, not to lenders who acquired the property at auction.

To qualify for PTFA protections, you must be a 'bona fide tenant.' This means: you are not the former homeowner or the child, spouse, or parent of the former homeowner; the lease was the result of an arm's-length transaction (meaning you negotiated it with the landlord at fair market value); and the rent is not substantially below fair market value (unless reduced by a government subsidy). These requirements exist to prevent sham leases designed solely to delay eviction — if you're a legitimate tenant paying market rent, you're protected.

State laws may provide additional protections beyond the PTFA. Some states and cities have 'just cause' eviction ordinances that limit when a new owner can terminate a tenancy. Some require relocation assistance payments. Some extend notice periods beyond 90 days. If you're a tenant in a foreclosed property, it's worth checking your state and local laws in addition to asserting your federal PTFA rights.

What should you do if your rented property is foreclosed? First, do not move out immediately — you have rights and you need time to exercise them. Second, gather your lease documents, rent payment records, and any correspondence with your landlord. Third, determine who the new owner is — the foreclosure sale notice should identify them, or you can check county property records. Fourth, communicate in writing: notify the new owner that you are a tenant with a valid lease and that you assert your rights under the PTFA. Fifth, if you receive an eviction notice that doesn't comply with the PTFA (less than 90 days, or before your lease term expires), challenge it immediately — the notice is defective.

At Professional Law Assist, we help tenants in foreclosed properties assert their PTFA rights. We prepare the documents needed to respond to eviction notices, negotiate with new owners for cash-for-keys agreements (relocation assistance in exchange for voluntary, orderly move-out), and provide the legal documents needed to enforce your rights if the new owner violates the PTFA.