Illinois Adds Foreclosure Tenant Rights

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On August 21, Illinois enacted SB 56, which adds rights for tenants of foreclosed properties. The law provides, among other things, that the entry of a judgment of foreclosure shall not terminate or otherwise affect the rights or interest of any occupant of a dwelling unit who has a lease or tenancy resulting from an arm’s length transaction and who is not the mortgagor, whether or not the occupant has been made a party in the foreclosure. The bill also provides that the holder of the certificate of sale, the holder of the deed issued pursuant to that certificate, or, if no certificate or deed was issued, the purchaser at the sale shall: (i) assume the lease or tenancy of the mortgaged real estate resulting from an arm’s length transaction entered into prior to the confirmation of sale; (ii) assume any federal, state, or local housing subsidy contract for the dwelling unit for the duration of the contract or the assumed lease, whichever is shorter; (iii) assume his or her interest in the mortgaged real estate subject to the rights of any occupant; and (iv) not terminate the occupancy or any occupant’s tenancy, except as otherwise allowed under state law. The law also states that a deficiency judgment may not be sought or entered against a deceased mortgagor. All of the changes take effect on November 19, 2013.

Topics:  Foreclosure, Mortgages, Tenants

Published In: General Business Updates, Consumer Protection Updates, Finance & Banking Updates, Residential Real Estate Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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