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Massachusetts High Court Rules Anti Eviction Law for Tenant in Foreclosed Properties Is Retroactive - Federal Natl. Mortgage Assn. v. Nunez

September 21, 2011

Our Claremont foreclosure defense attorneys have read several times about the plight of renters who are current on their rent, yet end up evicted because their landlords go into foreclosure. Often, they have no idea there's a problem until a sheriff or bank representative arrives at the home. A federal law addresses this by giving some tenants the right to at least 90 days' notice, but it doesn't apply in all situations. Massachusetts passed a law that went even further in August of 2010, and it's the basis of the Massachusetts Supreme Judicial Court's ruling this month in Federal National Mortgage Association v. Nunez. Jose Nunez was renting from a landlord who was foreclosed, and was served with an eviction notice but not actually evicted before Massachusetts passed its law. The high court found that the state law applied to Nunez and anyone else who remained in a home at the time the law was passed.

The Massachusetts Act, passed in August of 2010, prohibits owners of foreclosed homes from evicting residential tenants without either just cause or having sold the property. This goes further than the federal law, which simply requires a 90-day notice to the tenant. Fannie Mae, the new owner of the home where Nunez lived, bought the home at a foreclosure sale in November 2009 and served Nunez with a 90-day notice in January of 2010. After Nunez did not leave, Fannie Mae filed a summary process complaint seeking to have him removed. That case stretched until after the Massachusetts law was passed in August, and in September, Nunez moved to dismiss under the new law. The trial judge agreed and Fannie Mae appealed to the Appeals Court. The Massachusetts Supreme Judicial Court removed it on its own initiative.

On appeal, Fannie Mae argued that the law should not apply retroactively, since it had already purchased the property, served notice and filed its summary process complaint before the law was passed. The Massachusetts high court started by looking at whether the legislature intended to apply the law retroactively. This question turns in part on whether the definition of "eviction," as used in the law, applies only to the legal action Fannie Mae took to remove Nunez. The court found that it does not. Under Massachusetts law, "eviction" is defined as any action "intended to actually or constructively evict a tenant or otherwise compel a tenant to vacate." Constructive eviction, the court noted, could include cutting off utilities; "action" can just as easily apply to behaviors and acts as legal actions. Thus, Nunez had not yet been evicted, because eviction includes any action to remove him and the removal had not yet finished. And for that reason, the court ruled that the new law applies to anyone whose foreclosure was started but not yet finished at the time it passed. It also rejected Fannie Mae's argument that the effect on property rights of purchasers is too severe, noting that a purchaser who intends to live in the property may still evict the tenant without just cause.

As Placentia foreclosure defense lawyers, we're pleased to see the rights of renters upheld with this decision. Massachusetts, the federal government and many other governments pass these laws because foreclosure evictions hurt both renters and their neighborhoods. In addition, it's unclear whether they do much for the resale value of the property; after all, property that is vacant can get run down and attract vandals and wild animals. Finally, while Nunez may have been legally asked to leave well before the law, he was still living in the property as of the law's passage, making it difficult to argue that he had been evicted. Our Whittier foreclosure defense attorneys work with tenants and borrowers on these issues whenever we handle foreclosure or loan modifications on a rented home.

If you're facing foreclosure -- yours or someone else's -- and you'd like to speak to an experienced attorney about alternatives, don't hesitate to call Howard Law, P.C., for help. For a free, confidential case evaluation, send us a message online or call 1-800-872-5925.

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