Proposed RI Law Could Mean Relief for Tenants of Landlords in Foreclosure
At Foreclosure-Fighter, we've covered the issue of renters losing their homes because of their landlord's foreclosure. Unfortunately, this phenomenon is becoming more and more common as foreclosure rates remain high throughout the United States.
But some measure of good might come from all this trouble, after all. According to reports from the Providence Journal, Rhode Island legislators are considering a new law that would give renters a right to earlier and more regulated notification in the case of their landlords' foreclosure.
The potential legislation, which is reportedly still being drafted, has already earned the support of Frank T. Caprio, the state's General Treasurer, and state housing officials.
If passed, the law will evidently require landlords to inform their tenants of a pending foreclosure at least 60 days before foreclosure actions begin. Further, the notice given to tenants must be in writing.
As the law now stands, no such requirements exist: landlords are required to give renters "reasonable notice" if they're going to be evicted, but that "reasonable" period can range from three days to more than a month. What's more, landlords currently have no obligation to inform tenants about foreclosure actions in the property's future.
Lawmakers supporting the proposed legislation have allegedly claimed that the law would serve as a measure of protection for those who have done nothing wrong (i.e. have remained current on payments) but could be at risk of suffering the negative effects of foreclosure.
The scenario of foreclosure for a renter with a perfect payment track record has become all too common these days, especially now that the housing market is in a serious slump. Many novice real estate investors purchased homes during the housing boom with adjustable rate mortgages that are now resetting to unmanageable rates.
Though it's easy to peg landlords as the "bad guys" in this scenario, their situation is often difficult as well. Faced with ever-increasing mortgage payments, a natural reaction may be to collect rent from tenants as long as possible, in hopes of catching up and breaking even in the future.
Unfortunately, too few people manage to salvage their struggling subprime mortgage loans, and too many renters are given unreasonably short notice that they're in store for eviction.
Current laws in Rhode Island forbid eviction without a court hearing, but many renters are not aware of their rights in this matter. For a legal eviction to occur, tenants must be given a 20-day summons to appear in court; however, if the tenant never shows up, a default ruling can be made to favor the house owner.
If your landlord has informed you of foreclosure where you're living, take a moment to investigate laws in your state and find out what your rights are.