WATSON COLEMAN BILL ENHANCING TENANT PROTECTIONS DURING FORECLOSURE APPROVED BY ASSEMBLY

WATSON COLEMAN BILL ENHANCING TENANT PROTECTIONS DURING FORECLOSURE APPROVED BY ASSEMBLY
(TRENTON) – The New Jersey General Assembly today passed legislation Assembly Majority Leader Bonnie Watson Coleman sponsored to strengthen the notification requirements for tenants living in a foreclosed property.
“Many tenants may not even know what rights they have when their building changes hands due to a foreclosure,” said Watson Coleman (D-Mercer). “We need to close that information gap. Tenant families need the peace of mind that comes from fully understanding their rights and knowing they will not lose their home because of a foreclosure.”
Under the bill (A-4063), buyers of a foreclosed residential property would be required to notify tenants of the ownership change and that they are not required to vacate. Similarly, creditors engaged in an ongoing foreclosure proceeding would be required to include a notice to residents that a foreclosure action has been initiated and that the ownership of the property may change, but that tenants are not required to vacate the premises in the event of a foreclosure.
Buyers of a foreclosed property also would be prohibited from engaging in any communication designed to persuade a tenant to vacate the property unless they make a bona fide monetary offer. Any acceptance of such an offer would be contingent upon the tenant having at least five business days to review its terms in writing, and by providing a signed acceptance. Violators would subject to either triple damages or a penalty of $2,000 plus attorney fees.
“No tenant should be forced or coerced out of their home when a building changes hands during a foreclosure,” said Watson Coleman. “And if an owner wants to provide a financial incentive to a tenant, that offer must be made above-board.”
The bill also would make administrative changes to the “Mortgage Stabilization and Relief Act” enacted earlier this year. First, it would require a creditor in a foreclosure action to notify the clerk of the municipality in which the property is located within 10 business days of initiating a foreclosure proceeding. The notice would include the name and contact information for the creditor representative responsible for handling complaints related to property maintenance.
Also, any creditor with a residential foreclosure proceeding before a Superior Court would be required to provide the clerk of the municipality in which the property is located a listing of all residential properties in the town that that creditor has a foreclosure action pending.
“Foreclosures don’t only impact a single family, they also can impact an entire neighborhood or overwhelm even a small town,” said Watson Coleman. “Creditors in a foreclosure proceeding may think they have a responsibility just to their own financial interest, but they also have an obligation to the greater community to ensure a property does not become an eyesore or safety hazard.”
The Assembly passed the measure 49-27.