The Federal “Protecting Tenants in Foreclosure Act of 2009” expired on December 31, 2014.

The North Carolina General Assembly has adopted Session Law 2015-178 which reinstates many of the same protections for tenants as the previous Federal Law.

Expanded benefits for tenants are included in the new legislation.

1. The legislation includes the following requirement for providing Notice of Foreclosure Sale to a Tenant:

If the property is residential and contains less than 15 rental units, including single-family residential real property, a copy of the Notice of Sale shall be mailed to any person who occupies the property pursuant to a residential rental agreement, by name, if known, or to occupant.  The notice should be mailed at least 20 days prior to the date of the foreclosure sale.

The Notice of Foreclosure Sale of residential real property with less than 15 rental units shall including the following:

Any person who occupies the property pursuant to a rental agreement entered into or renewed on or after October 1, 2007, may, after receiving the notice of sale, terminate the rental agreement by providing written notice of termination to the landlord, to be effective on a date stated in the notice that is at least 10 days, but no more than 90 days, after the sale date contained in the notice of sale, provided that the mortgagor has not cured the default at the time the tenant provides the notice of termination.  The notice shall also state that upon termination of a rental agreement, the tenant is liable for rent due under the rental agreement prorated to the effective date of termination.

      2.   The legislation also addresses the requirement for Notice to the Tenant to Vacate.
 
If the purchaser at foreclosure will not occupy the property as a primary residence, the purchaser shall assume title subject to the rights of any tenant to occupy the premises until the end of the remaining term of the lease or 1 calendar year from the date the purchaser acquires title, whichever is shorter.  The purchaser at foreclosure will provide to the tenant written notice to vacate 90 days before making an application for possession of the property.  In no event shall the purchaser be required to renew an existing lease. 

This requirement applies to a Lease which meets the following requirements:

(1) The Tenant is not the Debtor under the Security Instrument foreclosed or the child, spouse or parent of the Debtor.

(2) The Lease is in writing, not terminable at will, and requires the receipt of rent that is not substantially less than fair market rent.

If the purchaser at foreclosure will occupy the property as a primary residence purchaser must provide any tenant at least 90 days notice to vacate before making an application for possession of the property.  This provision is also applicable to a tenant that has an oral lease or a lease terminable at will.

Purchaser means any purchaser or successor in interest who has acquired title pursuant to a foreclosure sale under power of sale.

This legislation becomes effective October 1, 2015.