Monday, July 22, 2013

9th Circuit: No Right To Sue Landlords Under PTFA For Screwed Over Tenants In Foreclosed Homes; Right In Court Proceedings Limited To Defending Against Improper Boot

HousingWire reports:

  • Tenant protections are a way of life, especially in foreclosure cases, when a renter is often left dangling after a landlord loses a rental property to foreclosure.

    But no matter how many protections are crafted for tenants, a case out of the Ninth Circuit Court of Appeals, reveals just how slippery laws protecting renters can be.

    In Logan v. U.S. Bank National Association, the Ninth Circuit held that the 'Protecting Tenants at Foreclosure Act' does not create a private right of action for tenants to bring a civil challenge in court when they believe a financial firm has violated provisions of the act.

    Instead, the court said the act is designed to give tenants a defense to an eviction proceeding rather than a private right of action to file suit, enforcing parameters of the Act.

    The case developed when the plaintiff’s rental property ended up in the hands of US Bank after a foreclosure proceeding against her landlord. The tenant received a three-day notice of termination from the bank, according to the court records.

    Logan claimed in her lawsuit that the eviction process violated the Protecting Tenants at Foreclosure Act, which requires a 90-day notice prior to eviction when removing an existing tenant after foreclosure.

    Even though the act is designed to protect tenants, the ruling shows its power sticks when tenants are defending themselves against an eviction.

    With no private right of action under PTFA, renters stuck in this situation do not have the same power to create a "federal ejectment claim" or to enforce the PTFA.(1)
Source: Ninth Circuit: An act protecting tenants after foreclosure has its limits.

(1) Possibly, violation of the 'Protecting Tenants at Foreclosure Act' might give a screwed over tenant some basis to file suit against the landlord under a state unfair & deceptive acts & practices ('UDAP') law.

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