[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 3034 Introduced in Senate (IS)]







110th CONGRESS
  2d Session
                                S. 3034

   To protect the interests of bona fide tenants in the case of any 
foreclosure on any dwelling or residential real property, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 19, 2008

 Mr. Reid (for Mr. Kerry (for himself and Mr. Kennedy)) introduced the 
 following bill; which was read twice and referred to the Committee on 
                  Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
   To protect the interests of bona fide tenants in the case of any 
foreclosure on any dwelling or residential real property, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Protecting Tenants at Foreclosure 
Act of 2008''.

SEC. 2. EFFECT OF FORECLOSURE ON PREEXISTING TENANCY.

    (a) In General.--In the case of any foreclosure on any dwelling or 
residential real property after the date of enactment of this Act, any 
immediate successor in interest in such property pursuant to the 
foreclosure shall assume such interest subject to--
            (1) the provision, by such successor in interest of a 
        notice to vacate to any bona fide tenant at least 90 days 
        before the effective date of such notice; and
            (2) the rights of any bona fide tenant, as of the date of 
        such notice of foreclosure--
                    (A) under any bona fide lease entered into before 
                the notice of foreclosure to occupy the premises until 
                the end of the remaining term of the lease, except that 
                a successor in interest may terminate a lease effective 
                on the date of sale of the unit to a purchaser who will 
                occupy the unit as a primary residence, subject to the 
                receipt by the tenant of the 90 day notice under 
                paragraph (1); or
                    (B) without a lease or with a lease terminable at 
                will under State law, subject to the receipt by the 
                tenant of the 90 day notice under subsection (1),
        except that nothing under this section shall affect the 
        requirements for termination of any Federal- or State-
        subsidized tenancy or of any State or local law that provides 
        longer time periods or other additional protections for 
        tenants.
    (b) Bona Fide Lease or Tenancy.--For purposes of this section, a 
lease or tenancy shall be considered bona fide only if--
            (1) the mortgagor under the contract is not the tenant;
            (2) the lease or tenancy was the result of an arms-length 
        transaction; or
            (3) the lease or tenancy requires the receipt of rent that 
        is not substantially less than fair market rent for the 
        property.

SEC. 3. EFFECT OF FORECLOSURE ON SECTION 8 TENANCIES.

    Section 8(o)(7) of the United States Housing Act of 1937 is 
amended--
            (1) by inserting before the semi-colon in subparagraph (C) 
        the following: ``and in the case of an owner who is an 
        immediate successor in interest pursuant to foreclosure--
                            ``(i) during the initial term of the lease 
                        vacating the property prior to sale shall not 
                        constitute other good cause; and
                            ``(ii) in subsequent lease terms, vacating 
                        the property prior to sale may constitute good 
                        cause if the property is unmarketable while 
                        occupied, or if such owner will occupy the unit 
                        as a primary residence''; and
            (2) by inserting at the end of subparagraph (F) the 
        following: ``In the case of any foreclosure on any residential 
        real property in which a recipient of assistance under this 
        subsection resides, the immediate successor in interest in such 
        property pursuant to the foreclosure shall assume such interest 
        subject to the lease between the prior owner and the tenant and 
        to the housing assistance payments contract between the prior 
        owner and the public housing agency for the occupied unit, 
        except that this provision and the provisions related to 
        foreclosure in subparagraph (C) shall not shall not affect any 
        State or local law that provides longer time periods or other 
        additional protections for tenants.''.
                                 <all>