NJ Law Seeks To End Illegal "Bulldozing" Of Tenants Out Of Foreclosed Homes; F'closure Purchasers Now Required To Inform Renters Of Right To Stay Put

In Trenton, New Jersey, The Philadelphia Inquirer reports:

• A bill passed by the New Jersey Legislature [last week] would give tenants living in foreclosed buildings a better understanding of their rights. Part of a push by Public Advocate Ronald Chen's office, the bill requires that when a property is sold at a foreclosure sale, the buyer must notify tenants of their right to stay in their homes and explain to whom they should pay rent. The bill, which goes to the governor's desk, also makes lenders responsible for maintaining a property between the time a foreclosure filing is made and the sale. New Jersey law does not allow tenants to be evicted simply because of foreclosure.(1)

Source: Bill to aid tenants in foreclosed buildings passes.

(1) According to a recent story in The Star Ledger [see Tenants take fall for unpaid mortgages], there was an apparent urgent need for this law in New Jersey:

• "Realtors, lenders and property managers are all taking advantage of the fact that tenants don't know their rights," said state Public Advocate Ronald K. Chen, whose office handled complaints from more than 200 tenants, [...] who said they were unfairly treated in foreclosure cases last year. "It's all over the state. Realtors seem to be the biggest offenders in the suburbs and rural areas, and lenders, lawyers and management companies" are misinforming tenants in the cities, Chen said. "When we challenge them, they claim they didn't know they were violating tenants' rights. That is inexcusable."

• In a Housing and Urban Development survey last year, 2,000 New Jersey adults said they were homeless because they had been forced from their apartments. While some, no doubt, had been evicted legally for nonpayment, the HUD survey concluded foreclosure-based evictions accounted for much of the 70 percent increase in the number of homeless former renters.

• "A lot of homeless people are being shoved out of their buildings, and it is even worse for new immigrants who may have trouble with English and don't have leases," said Victor Salvo, director of Newark NOW, [a] storefront nonprofit referral agency [...]. "They feel they have no choice but to leave."

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• Most tenants [in New Jersey] don't know that, unless the new owner of their building is moving in, they not only can stay but can renew their leases. In New Jersey -- which, Chen says, has the strongest tenant-protection laws in the country -- new owners can evict only with cause, such as nonpayment. No lease? Tenants are still protected under whatever arrangement they had before the property changed hands. When a property reverts to the lender, any responsibility for tenants' security deposits is conveyed with the property, Chen says. If the apartment is sold, the deposit liability passes on to the new owner. Chen adds: "We know there are people out there still telling tenants -- wrongly -- to sue the former owner."