• Foreclosure's Innocent Victims (CNN Money Video  3:35)     01/23/2009
  The mortgage meltdown is not just affecting homeowners. Even renters who play by the rules are
  being evicted. This CNN Report interviews Housing and Government Officials in Rhode Island,
  and also tells the story of a Providence, RI tenant who was evicted 2 times over 8 months,
  because her Landlords were foreclosed upon.
  
  
• Information for Tenants in Foreclosed Buildings (Massachusetts Attorney General Website)
  
  
• MassLegalHelp Information For Massachusetts Residents About Tenant Rights After Foreclosure 
  
  
• Fannie Mae National REO Rental Policy F.A.Q.'s.
  

Foreclosure And Tenant Rights In The News

• Fannie Mae Annouces National REO Rental Policy  1/13/2009
  "Fannie Mae (FNM/NYSE) today announced the establishment of a new National Real Estate Owned (REO) Rental Policy
  that will allow qualified renters in Fannie Mae-owned foreclosed properties to stay in their homes. The company currently
  has an eviction suspension in place through the end of January which will allow for the new policy to be fully operationalized
  prior to the suspension concluding". (entire article)
  
  
• Hartford Renter's Fight Leads To Fannie Mae Policy Change (Hartford Courant) 12/16/2008
  "What began with a single mother in Hartford fighting her eviction has led to a policy change by Fannie Mae allowing
  renters to remain in their homes after their landlords are foreclosed on, a switch that could help thousands of renters
  across the country. Fannie Mae, one of two giant mortgage companies taken over by the federal government, said Monday it will end eviction proceedings against renters if they are current with their payments. Fannie Mae had a formal policy of evicting tenants following foreclosures against their landlords." (entire article) 
  

Foreclosure affects tenants, as well as homeowners, and unfrotuately this problem is often overlooked.

In Massachuestts, courts have determined that the foreclosing lender cannot just throw tenants out on the street by claiming they are trespassing on their property. This applies whether you as a tenant have a lease, or are just renting month to month (or other period of time) without an actual lease.

It appears that Massachiusetts recognizes that the lease survives foreclosure on the original landlord, at least to the extent it allows the tenant to recognize the new landlord and tender rent (attornment).

However in this situation you may be converted from a tenant with a lease to one now that only holds a tenancy at will. This would usually mean that the new landlord would have the ability to probably give you a much shorter notice to you, to vacate your apartment of home, etc.

Normally a new landlord would want to keep exisiting tenants in the building, as they are obviously a source of income, but many times new landlords may seek other uses for the rental property; for instance a home that was previously being used as a rental, and the new owner wants to put it up for sale for someone to occupy.

Below is a brief summary on some of Massachusetts law and cases about foreclosure and renters rights.

If you have any questions about what to do if your landlord is being foreclosed on, and  you are being threatened with evicition, please contact me for more information.

Tenancies Without A Lease


A tenancy at will, is basically a tenancy without a lease.

Massachusetts General Law Ch. 186, section 13 states as follows:

          "Tenancies at will cannot be terminated by operation of law by the "transfer" of the premises by
           the Landlord; the Tenant must be given the opportunity to attorn (recognize new Landlord and
           tender rent to the new Landlord.."

Tenancies With A Lease


In Massachusetts a case was brought before the Boston Housing Court in 1973 (Boston Housing Court vs. Hemmingway, 363 Mass. 184), that established that a landlord-tenant lease was no longer viewed as an estate in land, but now viewed as a contract for services.

• Section 8 Exisiting Housing Program - Under 42 USC section 1437F(d)(1)(B)(ii)
  
            "Exisiting Section 8 Program tenant's lease is not terminated by foreclosure."
  
  
• Eagle Mountain Co. v. Matthews, No. 28886 (Boston Housijng Court, Dec. 11, 1990) - Established that the common law doctrine that a later lease is extinguished by foreclosure of an earlier mortgage was no longer viable. Tenants who had signed a lease with a foreclosed landlord, were not trespassers, as having a tenancy at will was protected by stateute (see above for discussion on tenancy at will). Thus when a tenant's landlord is foreclosed upon, a leaseholder (renter), should stand at least equal to the rights of a tenant at will, and have the opportunity to "attorn" (regognize the new landlord, and tender rent), Absent any bad faith in the formation of the lease, the lease would appear to survive the landlord's foreclosure, at least to create a tenancy at will.
  
  
  • A Tenant-at-Will  - is one who occupies a rented premises without a lease but pays rent periodically (typically monthly). The agreement for the Tenancy-at-Will may be either written or verbal. Either the landlord or tenant may terminate this arrangement by giving written notice 30 days or one full rental period in advance, whichever is longer. No reason is required to terminate. If rent is paid the first of each month, notice should be given prior to the first day of the month. However, either the landlord or the tenant may be able to give notice as late as the first day of the month itself. For extra protection send the notice both by
    certified mail, return receipt-requested, and by regular mail.
    
  • A Rooming or Boarding House Tenancy is different from the two other types
    of tenancies. Termination notices vary depending on the length of
    tenancy:
    
  • Rooming or Boarding House Tenancy Payment periods and required notice by landlord
    • less than 30 days  - No Notice
    • every 30-90 days - 7 days Notice
    • once more than every 3 months - 30 days
    • (*Exception: The landlord is only required to give a 7-day notice if
      tenant is disorderly or bothersome to other tenants OR if tenant pays
      weekly.)
    • After three months of tenancy, the rooming house tenant is considered a
      tenant-at-will and afforded all rights of a tenant-at-will.
      
      
• Attorney General v. Dime Savings Bank of New York FSB, 596 N.E. 2d 1013, 413 Mass 284 (1992).
  Mortgagee (lender) who forecloses on residential property by the power of sale contained in the mortgage, may not bring trespass action against holdover tenents, or a mortgagor (mortgage borrower) in actual possession of the premises, after the foreclosure sale.