NLIHC and NLCHP report: Renters in foreclosed properties may face homelessness MortgagePress.comNational Low Income Housing Coalition, National Law Center on Homelessness and Poverty, renters, foreclosures, Danilo Pelletiere
Foreclosures are driving an increase in homelessness across the
country, according to a new report by the National Low Income
Housing Coalition (NLIHC) and the National Law Center on
Homelessness & Poverty (NLCHP), and with pro bono assistance
from the law firm of WilmerHale.
Renters of foreclosed properties are among those most at risk of
homelessness, but their plight has received little attention.
Without Just Cause outlines the rights, and lack thereof, for
renters in foreclosure in all 50 states and the District of
Columbia.
About 40 percent of families facing eviction due to foreclosure
are renters whose landlords have defaulted on their mortgages, and
these renters have little protection. If a landlord is foreclosed
upon, tenants who have diligently paid their rent on time may face
eviction without notice, coming home to find locks changed and
their belongings on the street. Some local sheriffs, such as
Sheriff Tom Dart of Cook County, Ill., made headlines for refusing
to evict renters in these cases.
The status of renters in foreclosure cases is a matter of state
law, and laws are complex and vary among the 50 states and the
District of Columbia. In practice, there are often even fewer
protections: Even if they have rights, many renters are often
unaware of them, and few have easy access to lawyers, who may also
be unaware of tenants' rights.
Major findings of this report show:
• Only 33 percent of states (17 states) require any type
of notice to tenants.
• Only 29 percent of states (14 and DC) require a judicial
process for foreclosure.
• In several states (e.g. FL, IO, WI, NY, OH) tenants may
remain only if they are not named in the foreclosure
proceeding.
• Only two percent of states (NJ and DC) explicitly
preserve tenants' rights in the lease after foreclosure.
Only 23 states provide some exceptions that may preserve tenants
rights. For example:
• In Connecticut, tenants who are elderly, disabled, or
receive federal housing subsidies (Section 8) are protected and
their tenancies preserved.
• In Illinois, if tenants are not named in the foreclosure
proceedings, they can maintain their lease, subject to the filing
of a "supplemental petition" by the lender.
• In nine states, the lease may be protected if it
predated the mortgage, depending on mortgage terms.
"This lack of protection for law abiding renters can result in
families losing their homes, children changing schools, and
communities being destabilized unnecessarily," said Danilo
Pelletiere, NLIHC research director. "Renter protections are
important to stopping the cycle of decline."
In response, NLIHC has called on Congress and the Administration
to provide:
• $10 billion for the National Housing Trust Fund over
2009-2010 to rehabilitate or build 100,000 rental homes for the
lowest income households using green standards.
• $2 billion in Emergency Shelter Grants, for homelessness
prevention and housing assistance to prevent low income renter
households from becoming homeless, and to rapidly re-house those
that do lose their homes; 400,000 households would be assisted.
• 400,000 new housing vouchers over 2009-2010, which would
assist another 4000,000 low income families afford modest rental
housing in what is likely to be a tightening market.
• Legal protections for tenants in properties subject to
foreclosure, including the requirement that existing leases and
contracts be honored by new owners and in the absence of a lease,
renters be provided with at least 90 days notice before
eviction.
"Roughly 40 percent of the families facing eviction are renters
and in some cases they receive as little as one week between
foreclosure and eviction. These families have limited time and
limited resources to find new housing, and without action, an
increase in homelessness is imminent," said NLIHC President Sheila
Crowley. "Congress and the Administration must take the needs of
those suffering the most in this recession into consideration."
The report Without Just Cause can be found online by clicking here.
For more information, visit www.nlihc.org.
