foreclosure_eviction “Helping Families Save Their Homes Act May 20, 2009” (S. 896)

Effective May 20, 2009 federal legislation establishes protections for renters living in foreclosed homes.  Effective October 1, 2009, Nevada state law also protects tenants that have been foreclosed upon.  In the event of foreclosure, existing bona fide leases for renters are honored, except in the case of month-to-month leases or owner occupants foreclosing in which case a minimum of 90 days notice will be required.  This is a major change from normal Landlord Tenant law in Nevada per NRS 118A and NRS 40.  It appears that the Tenant would need to still pay rent and otherwise remain in good standing, otherwise normal eviction for nonpayment/nuisance would ensue per state law.  Also, if the Tenant desires this protection, I suggest the Tenant produce their lease agreement, as soon as they can, to the lender that has foreclosed.

A lease is bona fide only if:

(1)   the mortgagor under the contract is not the tenant;

(2)   the lease or tenancy was the result of an arms-length transaction; or

(3)   the lease or tenancy requires the receipt of rent that is not substantially less than fair market rent for the property.

The actual law is here.

Forms for eviction in Clark County  are here.

Unlike the House version (H.R. 1106) it does not contain cramdown — a provision empowering bankruptcy judges to reduce principals and interest rates for homeowners in bankruptcy.

There is a helpful Renters in Foreclosure Toolkit  from The National Low Income Housing Coalition.

The Nevada October 1, 2009 NRS 40 will also further protect tenants under what is known as the form NOTICE TO TENANTS OF THE PROPERTYin this new statute tenants now get a minium of 60 days to vacate.