PTFA — Protecting Tenants at Foreclosure Act
Protecting Tenants at Foreclosure Act of 2009, as permanently extended by the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 (12 U.S.C. § 5220 note)
Overview
The Protecting Tenants at Foreclosure Act (PTFA) is a federal law that protects BONA FIDE TENANTS from immediate eviction after the property they rent is foreclosed upon. The PTFA requires: (1) a tenant with a lease must be allowed to stay until the END OF THE LEASE TERM (unless the new owner intends to occupy the property as a primary residence — then the tenant gets 90 days' notice minimum), (2) a tenant WITHOUT a lease (month-to-month) must receive at least 90 DAYS' NOTICE before eviction proceedings can begin, (3) the tenant must be a BONA FIDE tenant (arm's-length transaction, rent is not substantially less than fair market rent, and the tenant is not the borrower or the borrower's immediate family). The PTFA applies to ALL residential foreclosures on federally related mortgage loans.
Enacted: 2009 (sunset 2014; permanently reinstated June 23, 2018)
Enforcing Agency: Federal (statutory right, enforceable in state and federal court; no single federal enforcement agency)
Key Provisions
Lease Term Protection (§ 702(a)(1))
If a bona fide tenant has a lease, the new owner (foreclosure purchaser) takes the property subject to the lease. The tenant can remain until the end of the lease term. EXCEPTION: if the new owner will occupy the property as a primary residence, the owner may terminate the lease with 90 days' written notice.
Month-to-Month Tenant Protection (§ 702(a)(2))
Bona fide tenants without a lease (or with a lease terminable at will) must receive at least 90 DAYS' written notice before the new owner can initiate eviction proceedings. The 90 days runs from the date the tenant receives the notice — the owner cannot file eviction before the 90 days expire.
Bona Fide Tenant Definition (§ 702(b))
To qualify as a 'bona fide tenant,' the tenancy must: (1) be the result of an arm's-length transaction (not a sham), (2) require rent that is not 'substantially less than fair market rent' (unless the rent is reduced by a government subsidy), and (3) the tenant must NOT be the borrower, the borrower's child, spouse, or parent.
How This Law Protects Homeowners
While the PTFA primarily protects TENANTS, it also indirectly protects homeowner-borrowers who are renting out their property: tenants cannot be immediately evicted after foreclosure, which (1) keeps the property occupied and maintained rather than vacant and deteriorating, (2) provides rental income during the post-foreclosure transition, and (3) gives the tenants a stable period to find new housing. For borrowers facing foreclosure who are renting the property: inform tenants of their PTFA rights — they do not have to leave immediately upon foreclosure. For homeowners living in the property: the PTFA does not apply to you (you are not a tenant), but state laws may provide post-foreclosure occupancy protections (redemption periods, cash-for-keys programs).
Why This Matters in a Foreclosure
The PTFA is most relevant when: (1) the borrower is renting the property to tenants, (2) the foreclosure purchaser seeks to evict the tenants immediately, and (3) the tenants need time (90 days, or until lease end) to relocate. The PTFA preempts state eviction laws that provide less protection — it guarantees a federal minimum of 90 days for month-to-month tenants. In practice, foreclosure attorneys must comply with PTFA notice requirements before filing eviction, and violations support a tenant's defense to eviction and a potential claim for damages.
Common Violations
- •Filing an eviction action without providing the required 90-day notice to a month-to-month tenant
- •Terminating a fixed-term lease before the lease ends (unless the new owner will occupy as primary residence)
- •Refusing to recognize a bona fide lease after foreclosure
- •Failing to honor rent-control or Section 8 voucher protections that survive foreclosure
Available Remedies
- •Tenant can defend the eviction — PTFA compliance is a defense to eviction
- •Tenant can recover possession if unlawfully evicted in violation of PTFA
- •Tenant may recover actual damages (moving costs, temporary housing, increased rent)
- •In some jurisdictions, the PTFA supports a federal cause of action for damages (courts are split on whether PTFA creates a private right of action — most hold it does NOT, but state-law wrongful eviction claims can incorporate PTFA standards)
Recent Developments
The PTFA originally sunset in 2014 but was PERMANENTLY REINSTATED in 2018 as part of the Economic Growth, Regulatory Relief, and Consumer Protection Act (S.2155). It is now permanent federal law. During the COVID-19 pandemic, the CARES Act (2020) provided a temporary 120-day eviction moratorium for certain properties, which superseded the PTFA's 90-day notice for covered properties. The CARES Act moratorium has expired, and the PTFA is now the primary federal tenant protection in foreclosure.
Frequently Asked Questions
I'm a tenant — the property was foreclosed. How long can I stay?+
If you have a LEASE: you can stay until the end of the lease (unless the new owner will occupy it — then 90 days notice). If you are MONTH-TO-MONTH: you get at least 90 days written notice before eviction can start. The key: you must be a BONA FIDE tenant (not a family member of the borrower, paying close to market rent, legitimate arm's-length tenancy). Show your lease to the new owner immediately. They must honor it or provide the required notice.
Does the PTFA apply to me if I'm the homeowner?+
No. The PTFA protects TENANTS who RENT the foreclosed property — not the homeowner/borrower. If you are the homeowner living in the property, the PTFA does not apply. Instead, check: (1) your state's post-foreclosure redemption period (you may have months to remain), (2) cash-for-keys programs (the lender pays you to leave voluntarily), (3) state post-foreclosure eviction laws (some states require judicial eviction proceedings which can take months).
Related Federal Laws
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