Foreclosure is a legal process in which a lender, such as a bank, repossesses and sells a home when the homeowner falls behind on payments to a loan secured by the home. In cases where the home is being used as a rental property and the homeowner is also a landlord, it usually means the tenant is evicted.
Frequently, the sole remedy for the tenant is to sue the landlord for breach of contract under the lease agreement. Unfortunately, a successful suit often does not mean the renter gets to stay in the home, it only means that the landlord must pay damages which could include reimbursement of the security deposit and moving expenses. When the landlord is already in financial difficulty, this may result in a judgment in favor of the tenant which cannot be collected from the landlord.
The recent mortgage crisis has affected many homeowners who rent their homes.
As a byproduct, many renters have been evicted from properties that have been sold as a result of foreclosure. Fortunately, with the recent passage of the Housing and Economic Recovery Act of 2008, service members are now authorized a short distance move which may include reimbursement for a do-it-yourself-move (DITY) when they are forced to relocate because the landlord is in foreclosure.
The Joint Federal Travel Regulation was modified effective July 30 to incorporate this change. (See http://perdiem.hqda.pentagon.mil/perdiem/trvlregs.html.)
The change to the regulation includes the following information:
"An armed forces member who relocates from, or whose dependent relocates from, leased or rented private housing, by reason of a foreclosure action against the landlord is authorized a short distance move. This provision does not apply if a member and/or dependent is the homeowner. The HHG [household goods] move is to another dwelling from which the member is to commute daily to the PDS [permanent duty station] (or at a location at which the dependent resides)...Before use of this authority, a member is encouraged to exhaust remedies available under the Service Members Civil Relief Act (50 USC, App 531) and state law."
Service members should first contact their local legal assistance office to exhaust all legal remedies before contacting the transportation office to establish eligibility for this benefit.
For instance, in Maryland, courts have held that where the tenancy began before the mortgage was recorded, the tenant may retain a right of possession against the purchaser after the foreclosure sale. In cases where there is no right to remain on the property, a legal assistance attorney may still be able to help negotiate a new lease with the new homeowner thus allowing the service member to remain in the home.
In cases where a legal remedy is in doubt and the new homeowner is not interested in negotiating a new lease, the service member may still be able to delay an eviction by requesting a court hearing.
Maryland law provides that the tenants have the same rights and remedies against the purchaser in a foreclosure as they had against the original landlord on the day the mortgage was recorded. In such cases, a judge may delay the eviction pursuant to a provision of the Service Members Civil Relief Act or even delay the entire proceeding if the service member is unavailable due to a deployment or other critical military mission.
To make an appointment with an attorney from the Client Services Division, Office of the Staff Judge Advocate to discuss a foreclosure action or a short distance move as a result of a foreclosure action, call 410-278-1583 or visit building 4305, 3rd floor, room 346, Monday-Friday from 8 a.m. to 1 p.m.
Questions about eligibility and reimbursement for short distance moves pursuant to a foreclosure action can be directed to the staff of the Transportation Office, 410-306-2056.
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