Termination of Rental Agreement Upon Foreclosure
In 2009, Congress passed the Protecting Tenants at Foreclosure Act which provided safeguards to tenants in foreclosed properties. This Act expired at the end of 2014, but the Florida Legislature has enacted a new statutory provision that carries on similar requirements. On July 1, 2015, Section 83.561, Florida Statutes, “Termination of Rental Agreement Upon Foreclosure” became effective. This new statute explains the procedures for removing tenants from a foreclosed property. It is important for Homeowner Associations and Condominium Associations to be aware of these requirements as they often take title to properties at the conclusion of their lien foreclosure actions. If the association takes title to a property and there are tenants residing in the property the association must follow the requirements set forth in Section 83.561.
The first requirement is that the tenant be given a 30-day “Notice of Termination.” This form letter notifies the tenant that their rental agreement has been terminated and that they have 30 days to vacate the premises. If the tenant does not vacate the property within this 30-day period, the association can request that the court award a Writ of Possession and have the tenants forcibly removed from the property by the Sheriff.
In Section 83.561 not every tenant is granted the protection of this statute. The requirements in Section 83.561 do not apply to: 1) a tenant who is the child, spouse or parent of the previous homeowner, 2) a tenant whose rental agreement was not an arm’s length transaction, and 3) a tenant whose rental agreement allows for rent that is substantially less than fair market rent, unless it is subsidized by a government agency.
Every declaration is different and each community requires a specialized review and determination of whether, and how, a rental review process should be implemented. As such, no information in this article should be acted upon without first receiving professional legal advice.
This article was prepared by John L. Di Masi and Meagen V. Mann of the Law Offices of John L. Di Masi, P.A. The Law Offices of John L. Di Masi has practiced in the area of community association law in the Central Florida area since 2000.
John L. Di Masi, Esq.
Meagen V. Mann, Esq.
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