New Illinois Law To Ease Foreclosure-Eviction Trouble On Unwitting Tenants

In Illinois, Daily Southtown reports:

• "Renters who live in buildings under foreclosure will be protected from eviction if their landlords default on mortgage payments thanks to a new law sponsored by Sen. Maggie Crotty (D-Oak Forest). The legislation allows tenants who are up-to-date on rent payments to stay in their homes for 120 days after notice of a foreclosure hearing. Tenants could be evicted with little or no warning under previous law. "If somebody is making their rent payments and unbeknownst to them the landlords themselves aren't making their mortgage payments, I didn't think that's fair to give no notice to the renters," Crotty said."

The law, which takes effect January 1, 2008, was passed in response to the equity skimming practices engaged in by some real estate investors who, in getting in over their heads financially with an investment property, decide to cut their losses by stiffing the mortgage lender out of its mortgage payments while renting out the premises to a tenant, pocketing the monthly rent until the mortgage lender initiates foreclosure proceedings that culminate in a public auction of the premises. The tenants, unaware of the ongoing legal process in many cases, have been left with little time to move out and find new living accomodations.

For more, see New law gives foreclosure notice to help renters (Legislation inspired by Daily Southtown columns allows tenants to stay in their homes for 120 days if their landlords default on mortgage payments).

The actual Illinois statute can be found either at Public Act 95-0262, or at 735 ILCS 5/15‑1701.

For a related story of tenants finding themselves with having to vacate a rented foreclosed home on short notice, see Alsip family losing home because of landlord's refusal to make mortgage payments.

For other stories on tenants unknowingly renting homes in foreclosure, go here, or here, or here. unwittingly beta