II 

110TH CONGRESS 

2D SESSION S. 3034 

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 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 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 2008’’. 

6 SEC. 2. EFFECT OF FORECLOSURE ON PREEXISTING TEN7 ANCY. 

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

9 any dwelling or residential real property after the date of 


jbell on PROD1PC69 with BILLS
2 

•S 3034 IS

1 enactment of this Act, any immediate successor in interest 

2 in such property pursuant to the foreclosure shall assume 

3 such interest subject to— 

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

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

6 90 days before the effective date of such notice; and 

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

8 date of such notice of foreclosure— 

9 (A) under any bona fide lease entered into 

10 before the notice of foreclosure to occupy the 

11 premises until the end of the remaining term of 

12 the lease, except that a successor in interest 

13 may terminate a lease effective on the date of 

14 sale of the unit to a purchaser who will occupy 

15 the unit as a primary residence, subject to the 

16 receipt by the tenant of the 90 day notice under 

17 paragraph (1); or 

18 (B) without a lease or with a lease ter19 minable at will under State law, subject to the 

20 receipt by the tenant of the 90 day notice under 

21 subsection (1), 

22 except that nothing under this section shall affect 

23 the requirements for termination of any Federal- or 

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


jbell on PROD1PC69 with BILLS
3 

•S 3034 IS

1 that provides longer time periods or other additional 

2 protections for tenants. 

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

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

5 fide only if— 

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

7 tenant; 

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

9 arms-length transaction; or 

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

11 rent that is not substantially less than fair market 

12 rent for the property. 

13 SEC. 3. EFFECT OF FORECLOSURE ON SECTION 8 TENAN14 CIES. 

15 Section 8(o)(7) of the United States Housing Act of 

16 1937 is amended— 

17 (1) by inserting before the semi-colon in sub18 paragraph (C) the following: ‘‘and in the case of an 

19 owner who is an immediate successor in interest 

20 pursuant to foreclosure— 

21 ‘‘(i) during the initial term of the 

22 lease vacating the property prior to sale 

23 shall not constitute other good cause; and 

24 ‘‘(ii) in subsequent lease terms, 

25 vacating the property prior to sale may 


jbell on PROD1PC69 with BILLS
4 

•S 3034 IS

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

3 owner will occupy the unit as a primary 

4 residence’’; and 

5 (2) by inserting at the end of subparagraph (F) 

6 the following: ‘‘In the case of any foreclosure on any 

7 residential real property in which a recipient of as8 sistance under this subsection resides, the immediate 

9 successor in interest in such property pursuant to 

10 the foreclosure shall assume such interest subject to 

11 the lease between the prior owner and the tenant 

12 and to the housing assistance payments contract be13 tween the prior owner and the public housing agency 

14 for the occupied unit, except that this provision and 

15 the provisions related to foreclosure in subparagraph 

16 (C) shall not shall not affect any State or local law 

17 that provides longer time periods or other additional 

18 protections for tenants.’’. 

Æ 


jbell on PROD1PC69 with BILLS