Below is the tenant protection part of S. 896, signed into law 

by President Obama on May 20, 2009. 

Source: www.thomas.gov 

S.896
 

Helping Families Save Their Homes Act of 2009 (Engrossed as Agreed to or Passed by 

Senate) 

TITLE VII--PROTECTING TENANTS AT FORECLOSURE ACT
 

SEC. 701. SHORT TITLE. 

This title may be cited as the `Protecting Tenants at Foreclosure Act of 2009'. 

SEC. 702. EFFECT OF FORECLOSURE ON PREEXISTING TENANCY. 

(a) In General- In the case of any foreclosure on a federally-related mortgage loan or on 

any dwelling or residential real property after the date of enactment of this title, any 

immediate successor in interest in such property pursuant to the foreclosure shall assume 

such interest subject to--

(1) the provision, by such successor in interest of a notice to vacate to any bona 

fide tenant at least 90 days before the effective date of such notice; and 

(2) the rights of any bona fide tenant, as of the date of such notice of foreclosure--

(A) under any bona fide lease entered into before the notice of foreclosure 

to occupy the premises until the end of the remaining term of the lease, 

except that a successor in interest may terminate a lease effective on the 

date of sale of the unit to a purchaser who will occupy the unit as a 

primary residence, subject to the receipt by the tenant of the 90 day notice 

under paragraph (1); or 

(B) without a lease or with a lease terminable at will under State law, 

subject to the receipt by the tenant of the 90 day notice under subsection 

(1), 

except that nothing under this section shall affect the requirements for termination 

of any Federal- or State-subsidized tenancy or of any State or local law that 

provides longer time periods or other additional protections for tenants. 

(b) Bona Fide Lease or Tenancy- For purposes of this section, a lease or tenancy shall be 

considered bona fide only if--

(1) the mortgagor under the contract is not the tenant; 

(2) the lease or tenancy was the result of an arms-length transaction; or 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3) the lease or tenancy requires the receipt of rent that is not substantially less 

than fair market rent for the property. 

(c) Definition- For purposes of this section, the term `federally-related mortgage loan' has 

the same meaning as in section 3 of the Real Estate Settlement Procedures Act of 1974 

(12 U.S.C. 2602). 

SEC. 703. EFFECT OF FORECLOSURE ON SECTION 8 TENANCIES. 

Section 8(o)(7) of the United States Housing Act of 1937 (42 U.S.C. 1437f(o)(7)) is 

amended--

(1) by inserting before the semicolon in subparagraph (C) the following: `and in 

the case of an owner who is an immediate successor in interest pursuant to 

foreclosure during the initial term of the lease vacating the property prior to sale 

shall not constitute other good cause, except that the owner may terminate the 

tenancy effective on the date of transfer of the unit to the owner if the owner--

`(i) will occupy the unit as a primary residence; and 

`(ii) has provided the tenant a notice to vacate at least 90 days 

before the effective date of such notice.'; and 

(2) by inserting at the end of subparagraph (F) the following: `In the case of any 

foreclosure on any federally-related mortgage loan (as that term is defined in 

section 3 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2602)) 

or on any residential real property in which a recipient of assistance under this 

subsection resides, the immediate successor in interest in such property pursuant 

to the foreclosure shall assume such interest subject to the lease between the prior 

owner and the tenant and to the housing assistance payments contract between the 

prior owner and the public housing agency for the occupied unit, except that this 

provision and the provisions related to foreclosure in subparagraph (C) shall not 

shall not affect any State or local law that provides longer time periods or other 

additional protections for tenants.'. 

SEC. 704. SUNSET. 

This title, and any amendments made by this title are repealed, and the requirements 

under this title shall terminate, on December 31, 2012.