Oregon Legislature Passes Bill to Protect Tenants in Rental Foreclosures

The Oregon legislature has passed a law to protect not only tenants when their rental properties are foreclosed, but also to protect purchaser of foreclosed properties from liability – unless they opt to become landlords[1]. Senate Bill 491, which is due to be signed by the state governor in the coming weeks, “requires better notice to tenants of their options throughout the foreclosure process” and also has made technical, mandatory amendments to eviction forms to “ensure better implementation.” The bill is designed to correspond with federal laws that also protect tenants and will “help remove the inconsistencies between the state and federal law,” said state representative Jason Conger[2]. Conger believes that lenders and purchasers of foreclosed properties will benefit from the “greater consistency and clarity in the law” in a very litigious period of real estate history. Currently, many Oregon investors – and, indeed, investors around the country – are becoming leery of purchasing foreclosure properties due to the myriad issues with lenders’ and mortgage servicers’ foreclosure processes.

Most people agree that tenants who are paying their rent should not be evicted from foreclosure homes without adequate notice and time to find a new place to live. However, critics of this type of legislation argue that it gives tenants too much leeway in the process and could actually keep non-paying parties in their homes long after they should have been removed.

Do you think that this type of legislation handles the issue appropriately?

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