18A — January 16 - 29, 2015 — M id A tlantic

Real Estate Journal


2015 F orecast

By Derek Dissinger, Barley Snyder Proposed PA bill could give protection to tenants of foreclosed property owners


n 2009, Congress passed the Protecting Tenants at Foreclosure Act, which re-

December 31, 2014. With the federal law expiring, Pennsylvania State Rep. Tina Davis recently wrote a house co- sponsorshipmemorandum stat- ing she intended to reintroduce a house bill whichwould provide similar protections to tenants. House Bill 1743 of the 2013 legislative session proposed to amend the Pennsylvania Land- lord and Tenant Act of 1951, by requiring landlords to provide notice to their tenants that a judgment in mortgage foreclo- sure has been entered, and pro- hibits sale of the property until at least 90 days have passed

since the notice was given. Although the proposed state bill is similar to the now expired Protecting Tenants at Foreclo- sure Act, the proposed amend- ment differs from the Protecting Tenants at Foreclosure Act in 4 significant ways: 1. The state law would apply to all loans which have been foreclosed, not just federally- related loans. 2. Pennsylvania’s Landlord and Tenant Act, and therefore the proposed bill, applies to all leases, both residential and commercial. 3. The responsibility to pro-

vide notice to tenants is on the landlord as opposed to the bank. 4. The proposed state bill would require the notice to be given at least 90 days’ prior to the sheriff sale, as opposed to the eviction of the tenant. The proposed bill is bothmore onerous on foreclosing banks, and less protective to tenants than the Protecting Tenants at Foreclosure Act. Even though the proposed bill would require the landlord to provide notice to its tenants of the entered judgment, the foreclosing bank would almost certainly provide its own notice because it is a

requirement to the foreclosure sale, and the bank would as- sume its borrower failed to provide the notice. Under the federal law, the bank would only provide a 90-day notice to a tenant if it planned on evicting the tenant. Under the proposed bill, all tenants would receive the notice, even if the bank or a purchaser at a sheriff sale would want the tenant to stay. Due to the notice being given prior to the sheriff sale, tenants receiving a notice would then have to make a decision about whether or not they are going to relocate. If tenants do not decide to relocate, they could still be subsequently evicted by the bank with either a 10, 15 or 30-day notice, depending on the length of lease and circum- stances (such as a failure to pay rent), which is less than under the former federal law. Tenants may also decide to leave (which could be a breach of their lease), even though the bank would want them to stay and occupy the premises. If the bill is reintroduced, many of questions regarding its application will likely be answered, such as whether this new notice requirement applies to residential and com- mercial leases, whether it can be waived in a lease and how the notice should be given. The bill, when reintroduced, may gain momentum in the current legislative sessions as a result of the federal Protecting Tenants at Foreclosure Act expiring. Derek Dissinger is an at- torney with Barley Sny- der where he counsels his clients in a variety of real estate and finance & credi- tors’ rights issues. He is also a licensed title agent. n the top markets to watch are Pennsylvania and New Jersey. The housing market will con- tinue to lag while multi-fam- ily investment and rents are prime for expansion. Barring a major interest rate increase, which is unlikely, multi-family will continue its meteoric rise and secure its rightful spot as the past decade’s leading com- mercial real estate asset. Ken Uranowitz is presi- dent of Livingston, NJ-based Gebroe-HammerAssociates, and has been with the firm since its inception in 1975. n . Multi-family in- vestment outlook continued from page 16A

quires banks w h o h a v e foreclosed on “federal relat- ed” mortgage loans to give t enan t s a t least 90 days’ written notice prior to evic-

Derek Dissinger

tion. The act was originally set to expire at the end of 2012, but it was extended by the Dodd- Frank Act. The Protecting Ten- ants at Foreclosure Act expired

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