Lead Sponsor: Senator Jamie Eldridge
Summary: This bill would allow homeowners and their families, if they fulfill the responsibilities of tenancy, to remain in their homes and pay rent after foreclosure under limited circumstances and for a limited period of time.
Why This Matters: Foreclosed homes often remain vacant for months or even years, with adverse effects for the neighborhood and surrounding community: blight, neglect, public safety risks, and a decrease in local property values.
Allowing former homeowners to remain in their foreclosed homes as tenants will help us reduce the number of unnecessary vacancies in our communities, increasing neighborhood stability while decreasing the economic and social costs to our communities from foreclosures.
At the same time, the former homeowners would be required to meet all the standard tenant responsibilities to protect the property, not create a nuisance, and pay fair market rents. The vast majority of former homeowners are already committed to upkeep for their home and can afford fair market rents.
What this Bill Would Do: This bill amends the Massachusetts post-foreclosure tenant law, G.L. c. 186a, to allow homeowners and their families to remain in their homes and pay rent after foreclosure under certain limited circumstances for a limited period of time.
This legislation is intended to prevent unnecessary vacancies, which occur when a bank forecloses on a home, evicts the former homeowners, and then leaves the property vacant. In order for the former owner to remain as an occupant after foreclosure, the following conditions must be met:
(1) the purchaser at foreclosure must be either the holder of the mortgage or in the post-foreclosure investment business;
(2) the former homeowners must comply with basic occupancy obligations and tenant law: pay the rent (in an amount agreed to between homeowner and lender or, if no agreement, the HUD fair market rent), not cause a nuisance, not commit illegal acts, etc;
(3) if the former homeowner does not comply with these standard rules, the purchaser at foreclosure can bring an eviction action against the former homeowner; and
(4) the purchaser at foreclosure may also bring an eviction action against the former homeowner if the property is sold.
You can view the full text of the bill and track its history here.