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New Florida Law Fills in the Gap For Renters After the Expiration of the Protecting Tenants in Foreclosure Act

Most people are familiar with the foreclosure crisis and what this means for individuals owning a home, but there is pressure trickling down from this problem all the way to renters. A growing number of renters in Florida move into homes after losing their own to foreclosure, only to learn later that the owners of these rental homes are also underwater. The good news is that South Florida’s foreclosure rate dropped dramatically last year to the tune of 50 percent, but it’s still much higher than many other places around the country.

Affordable housing advocates say that even though the overall news about foreclosures in South Florida is good because of the downward trend, it is still difficult for renters to find a home they can plan to stay in for some time. With the foreclosure rate still being twice the national average, it is no surprise that some renters find themselves hopping from location to location without much luck if the homeowner eventually is unable to pay the mortgage.

Moody’s Analytics argues that one in every 87 homes in this region could fall under this category. Data from Zillow show that more than 15 percent of homes located in Miami-Dad, Broward, and Palm Beach counties are currently underwater. With such high turnover of tenants, many tenants do not even realize that a home is being foreclosed until it’s too late. That’s why there’s a new law benefiting tenants in Florida. The law, HB 779, became active on July 1, 1995 and was aimed at replacing the Federal Protecting Tenants in Foreclosure Act. That federal law allowed tenants to stay in their homes until the lease for the property expired or a minimum of 90 days if the purchaser at the foreclosure sale intended to live in the property as their primary household. This fix was only temporary, however, and it expired at the end of 2014.

Under the new Florida law, when a foreclosed home is sold, the new owner must provide any existing tenants at least thirty days to vacate the residence.  The new law does not require the new owners to honor any existing lease with the tenant. Following a foreclosure sale, only a notice to terminate a rental agreement is required. The tenant can remain in the property for 30 days following receipt of the written notice to terminate.  If the tenant fails to vacate the property by the end of the 30 day period, the purchaser at the foreclosure sale may apply to the clerk of the court for a writ of possession.

Even good news from a home sale can cause problems with renters. As more homes are getting traction in terms of sales, some renters are learning that they need to vacate the premises quickly. As the market improves, there are more people looking to sell a home, even one that might already be occupied by renters. It is important for people in this position to understand how to best go about a sale without causing any further legal entanglements. Getting Florida’s real estate market back on track is a focus not only for those who own properties but also by those who advocate for fair housing. Those advocates say that allowing the market to become vibrant again should not necessarily mean disenfranchising tenants, however.

To learn more about Florida real estate news and what it means for buyers and sellers, stay tuned to our blog.

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