Tenant Rights in Residential Foreclosures in Florida

Florida foreclosure rates are among the highest in the nation.

Residential tenants look to federal, state and local laws to protect them from the effects of foreclosure. Eviction, lack of property maintenance and loss of security deposits rank among the most deleterious consequences to renters in these properties. Not as strong as renters' rights in some other states, the laws that aim to help Florida tenants in foreclosed properties do provide some buffer from the foreclosure fallout.

Federal Laws

The federal Protecting Tenants at Foreclosure Act of 2009 provides Florida tenants with their two most significant rights: lease protection and eviction notice. Before this law went into effect, a lease signed after a mortgage was taken out was invalidated with a foreclosure. The act requires foreclosing lenders and buyers to honor existing leases. This is particularly valuable to tenants with fixed-term leases for which the term has yet to expire. Unless a buyer intends to live in the unit, the tenants are guaranteed tenancy through the end of the lease so long as they pay their rent and live up to all other lease requirements. The act also requires the new owners to provide a notice at least 90 days before beginning an eviction action in court.

State Laws

Only New Jersey, New Hampshire and Massachusetts have statewide controls that prohibit eviction after foreclosure. In all other states, including Florida, there are no statewide prohibitions on evictions. An owner doesn't need to give any reason to evict -- just notice. However, basic state landlord-tenant laws in Florida require owners to comply with local building, housing and health codes and require a landlord to return a security deposit to a tenant or transfer it to the new owner when title transfers. The tenant may take a landlord to small claims court to get a security deposit back if it hasn't been transferred to the new owner.

Local Laws

About 22 cities, most of them in New York and California, according to the National Housing Law Project, have local laws that prohibit eviction after a foreclosure. Most of these rules are associated with longstanding rent control ordinances but a few, notably in California, were passed explicitly to stop foreclosure evictions without a just cause, such as failure to pay rent. Florida does not have any cities with local eviction restrictions. However, the 11th Judicial Circuit Court, which covers the Miami-Dade County are, requires all writs of possession -- documents allowing evicting -- to reference the Protecting Tenants at Foreclosure Act. This prevents lenders from failing to comply and notifies tenants of their rights.

Cash For Keys

Cash for keys is a program many foreclosing lenders use to avoid having to go to court for evictions after foreclosure. Lenders provide a cash payment to occupants in exchange for their voluntary move. While there is no legal right to cash for keys, lenders have three strong incentives to participate: to save court costs, to reduce the amount of time to vacate a unit, and to avoid adverse publicity. If you receive a 90-day notice to vacate, you have nothing to lose by calling the lender and asking for both cash and more time.

References

• "The Wall Street Journal"; What Your Landlord Isn't Telling You; Kelli B. Grant; November 2010
• Federal Reserve Board: Protecting Tenants at Foreclosure
• National Housing Law Project: State and Local Tenant Protections
• Division of Consumer Services: Florida's Landlord/Tenant Law
• "The New Yorker"; Cash for Keys; Tad Friend; April 2009