II 110th CONGRESS 2d Session S. 3034 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.

1.

Short title

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

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.

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..