I 

111TH CONGRESS 

1ST SESSION H. R. 1247 

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 HOUSE OF REPRESENTATIVES 

MARCH 2, 2009 

Mr. ELLISON (for himself, Ms. WATERS, Mr. CAPUANO, and Mrs. MCCARTHY

of New York) introduced the following bill; which was referred to the 

Committee on Financial Services 

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 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Protecting Tenants 

5 at Foreclosure Act of 2009’’. 

6 SEC. 2. EFFECT OF FORECLOSURE ON EXISTING TENANCY. 

7 (a) IN GENERAL.—In the case of any foreclosure on 

8 any dwelling or residential real property, any immediate 


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1 successor in interest in such property pursuant to the fore2 closure shall assume such interest subject to— 

3 (1) the provision, by such successor in interest, 

4 of a notice to vacate to any bona fide tenant at least 

5 90 days before the effective date of such notice; and 

6 (2) the rights of any bona fide tenant, as of the 

7 date of such notice of foreclosure— 

8 (A) under any bona fide lease entered into 

9 before the notice of foreclosure to occupy the 

10 premises until the end of the remaining term of 

11 the lease, except that a successor in interest 

12 may terminate a lease effective on the date of 

13 sale of the unit to a purchaser who will occupy 

14 the unit as a primary residence, subject to the 

15 receipt by the tenant of the 90 day notice under 

16 paragraph (1); or 

17 (B) without a lease or with a lease ter18 minable at will under State law, subject to the 

19 receipt by the tenant of the 90 day notice under 

20 subsection (1), 

21 except that nothing under this section shall affect 

22 the requirements for termination of any Federal- or 

23 State-subsidized tenancy or of any State or local law 

24 that provides longer time periods or other additional 

25 protections for tenants. 


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1 (b) BONA FIDE LEASE OR TENANCY.—For purposes 

2 of this section, a lease or tenancy shall be considered bona 

3 fide only if— 

4 (1) the mortgagor under the contract is not the 

5 tenant; 

6 (2) the lease or tenancy was the result of an 

7 arms-length transaction; and 

8 (3) the lease or tenancy requires the receipt of 

9 rent that is not substantially less than fair market 

10 rent for the property. 

11 SEC. 3. EFFECT OF FORECLOSURE ON SECTION 8 TENAN12 CIES. 

13 Paragraph (7) of section 8(o) of the United States 

14 Housing Act of 1937 (42 U.S.C. 1437f(o)(7)) is amend15 ed— 

16 (1) in subparagraph (C), by inserting before the 

17 semicolon at the end the following: ‘‘, and in the 

18 case of an owner who is an immediate successor in 

19 interest pursuant to foreclosure— 

20 ‘‘(i) during the initial term of the ten21 ant’s lease having the property vacant 

22 prior to sale shall not constitute good 

23 cause; and 

24 ‘‘(ii) in subsequent lease terms, having 

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1 stitute good cause if the property is un2 marketable while occupied, or if such 

3 owner will occupy the unit as a primary 

4 residence’’; 

5 (2) in subparagraph (E), by striking ‘‘and’’ at 

6 the end; 

7 (3) by redesignating subparagraph (F) as sub8 paragraph (G); and 

9 (4) by inserting after subparagraph (E) the fol10 lowing: 

11 ‘‘(F) shall provide that in the case of any 

12 foreclosure on any residential real property in 

13 which a recipient of assistance under this sub14 section resides, the immediate successor in in15 terest in such property pursuant to the fore16 closure shall assume such interest subject to the 

17 lease between the prior owner and the tenant 

18 and to the housing assistance payments con19 tract between the prior owner and the public 

20 housing agency for the occupied unit; if a public 

21 housing agency is unable to make payments 

22 under the contract to the immediate successor 

23 in interest after foreclosure, due to action or in24 action by the successor in interest, including 

25 the rejection of payments or the failure of the 


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1 successor to maintain the unit in compliance 

2 with paragraph (8) or an inability to identify 

3 the successor, the agency may use funds that 

4 would have been used to pay the rental amount 

5 on behalf of the family— 

6 ‘‘(i) to pay for utilities that are the 

7 responsibility of the owner under the lease 

8 or applicable law, after taking reasonable 

9 steps to notify the owner that it intends to 

10 make payments to a utility provider in lieu 

11 of payments to the owner, except prior no12 tification shall not be required in any case 

13 in which the unit will be or has been ren14 dered uninhabitable due to the termination 

15 or threat of termination of service, in 

16 which case the public housing agency shall 

17 notify the owner within a reasonable time 

18 after making such payment; or 

19 ‘‘(ii) for the family’s reasonable mov20 ing costs, including security deposit costs; 

21 except that this subparagraph and the provi22 sions related to foreclosure in subparagraph (C) 

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1 vides longer time periods or other additional 

2 protections for tenants.’’. 

Æ 


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