Community Associations Must Comply with Florida Law Protecting Tenants in Foreclosed Residences

Many community association boards and property managers are still unfamiliar with Florida Statute 83.561 enacted this summer, offering limited protections to tenants in foreclosed homes.

During the 2008 – 2014 foreclosure crisis, a federal law was passed, The Protecting Tenants at Foreclosure Act, which assisted bona fide tenants by providing them the opportunity to stay in the property after the completion of the foreclosure. The Protecting Tenants at Foreclosure act expired in December 2014 to be replaced by Florida Statute 83.561.

Similar to the federal act, Florida Statute 83.561 only applies to tenants who are renting under a valid arm’s length transaction rental agreement for a rate that is not significantly below market value, and where the tenant is not the mortgagor in the subject foreclosure or the child, spouse or parent of the mortgagor in the foreclosure.

Unlike the expired federal act, Florida Statute 83.561 requires a new owner, including an association, wishing to terminate the tenancy after acquiring a property via foreclosure, to provide the tenant with a 30-day written notice of termination, which should be in substantially the following form:

You are hereby notified that your rental agreement is terminated on the date of delivery of this notice, that your occupancy is terminated 30 days following the date of the delivery of this notice, and that I demand possession of the premises on …(date)…. If you do not vacate the premises by that date, I will ask the court for an order allowing me to remove you and your belongings from the premises. You are obligated to pay rent during the 30-day period for any amount that might accrue during that period. Your rent must be delivered to . . . (landlord’s name and address).

If the tenant fails to vacate the property after the 30-day period expires, the new owner may apply to the court for a writ of possession based upon a sworn affidavit that the 30-day notice of termination was delivered to the tenant and the tenant has failed to vacate the residence after the 30-day period has expired. If the court awards a writ of possession, the writ must be served on the tenant.

Unlike the federal act, Florida Statute 83.561 does not require for the new owner to intend to occupy the residence in order to terminate the tenancy, nor does it seek for the tenant to complete the terms of the rental agreement. Rather, the new law assist tenants in foreclosed homes by providing a 30-day window to seek alternate living arrangements, while ensuring compliance by the new owner of the tenant’s rights as afforded under Florida law.

Community associations that acquire title to a unit via foreclosure and wish to terminate a tenancy should consult with qualified legal counsel in order to ensure compliance with the requirements under Florida Statute 83.561.