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foreclosure during lease

The Protecting Tenants at Foreclosure Act of 2009 (PTFA) is a federal law (statute) that became effective on May 20, 2009. The law expired on December 31, 2014 but was restored on June 23, 2018. The PTFA is located in the United States Code, beginning at 12 U.S.C. §5220.

The PTFA protects tenants from immediate eviction by persons or entities that become owners of residential property through the foreclosure process and extends additional protections for tenants with U.S. Department of Housing and Urban Development (HUD) Section 8 vouchers. The law is self-executing—no federal agency has authority to issue regulations implementing the law or to interpret the law.

The fundamental purpose of the PTFA is to ensure that tenants facing eviction from a foreclosed property have adequate time to find alternative housing. To achieve that objective, the law establishes a minimum time period that a tenant can remain in a foreclosed property before eviction.

The PTFA does not affect any state or local law that provides longer time periods or other additional protections for tenants.

Bona Fide Lease or Tenancy

A lease or tenancy is bona fide if:

• the tenant is not the mortgagor or the parent, spouse, or child of the mortgagor;

• the lease or tenancy is the result of an arms-length transaction; and

• the lease or tenancy requires rent that is not substantially lower than fair market rent or is reduced or subsidized due to a federal, state, or local subsidy.


Under the PTFA, the immediate successor in interest at foreclosure must:

• provide bona fide tenants with 90 days notice prior to eviction; and

• allow bona fide tenants with leases to occupy property until the end of the lease term—except the lease can be terminated on 90 days notice if the unit is sold to a purchaser who will occupy the property.

In Texas, the Protecting Tenants at Foreclosure Act of 2009 (PTFA) provides federal protections for tenants living in residential properties that go through foreclosure. The PTFA, which was reinstated on June 23, 2018, after expiring in 2014, ensures that tenants are not immediately evicted by new owners who acquire a property through foreclosure. It requires that bona fide tenants, who are not related to the mortgagor and are paying fair market rent, receive at least 90 days' notice before eviction. Additionally, if a tenant has a lease, they are generally allowed to stay until the lease term ends, unless the property is sold to someone who plans to occupy it as a primary residence, in which case the lease can be terminated with 90 days' notice. The PTFA operates alongside Texas state law, and does not override any state or local laws that offer longer notice periods or additional protections for tenants.

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