Law offers new hope for renters

Christine and Stanley Seals still haven't unpacked the moving boxes that are stacked to the ceiling in their garage.

Weeks after they agreed to rent their three-bedroom home in Summerville — and before they could fully unpack — the couple found out that their landlord had stopped paying the mortgage on the property. The home, they were told, would likely be sold at a county foreclosure auction.

The news cast uncertainty over how long they'd be able to live in the property. Would they get more than one-week notice before being evicted? Would they get their deposit back?

"You've done nothing wrong, but you feel like you're being punished," said Christine Seals.

A new federal rule clears up some of that uncertainty and ensures that renters like the Seals will get at least 90 days to find a new home.

The law, which took effect in late May, requires that most renters whose residences were sold through the foreclosure process get at least 90 days notice' before having to leave.

And if the home is sold to an investor or back to the lender — as many are these days — the new owner will have to allow tenants to stay in the property for the full duration of the lease.

The provision increases the amount of time that renters who live in foreclosed properties have to vacate the property, which is typically between 10 and 30 days.

Before, renters had little recourse because existing leases are terminated in a foreclosure sale.

"Renters have been caught up in this as innocent victims," said Jim Kelly of Carolina One Real Estate, who specializes in foreclosed properties. "A gleam of hope is that the government realized this and became stalwart to protect them."

Under the law, foreclosure buyers who want to live in the property will need to give the occupants 90 days' notice to leave.

Tenants with a month-to-month lease are also entitled to 90 days' notice.

"The tenants generally don't have notice that the property's been foreclosed on," said Lil Ann Gray, an attorney for the S.C. Department of Consumer Affairs. "More often than not, they continue to make their rental payments to whomever was the prior owner to the property."

The latest program complements a host of programs that the Obama administration has introduced to help homeowners save their primary residences.

Often, investment properties aren't eligible for those programs even though the National Low Income Housing Coalition estimates that almost half of all foreclosed properties are occupied by renters.

Reach Katy Stech at 937-5549 or kstech@postandcourier.com.

Editor's note: Earlier versions of this story contained incorrect information with regard to how much notice month-to-month renters receive under the new law. The Post and Courier regrets the error.