Finance news

Renters who are caught up in foreclosures or short sales may get more time to get out before the sheriff shows up to evict them, if a proposed bill gets traction in the Florida Legislature.

HB 125, sponsored by state Rep. Hazelle Rogers, D-Lauderhill, and co-sponsored by state Rep. Darren Soto, D-Orlando, is scheduled to be taken up Tuesday by the Civil Justice & Courts Policy Committee. Its companion bill is SB 854.

Soto, an attorney who is handling more than 250 foreclosure defense cases, said tenants often get served the same paperwork from the bank as the owner, which causes stress and confusion.

“They basically receive a complaint, but it doesn’t tell them their rights, other than that they have to respond,” he said. “They don’t know to not pay the rent or to pay the rent, and their landlord is usually pretty mum.”

However, some worry that the bill could limit owner rights by requiring the owner or lender to give the tenant first right of refusal to buy the property.

“A lease with a tenant has a beginning and an end date,” said Stephen Weiss, VP of business development for Fort Lauderdale-based Foreclosure Response Team, a private company specializing in short sales. “It doesn’t give tenants a right or obligation to own my property. This is hindering and impairing on the value of real estate.”

The bill:

• Requires lenders to notify tenants or lessees of potential foreclosure or short-sale actions against rental property.
• Requires lenders to provide tenants or lessees first right of refusal to purchase property at fair market value, and specifies eligibility requirements to exercise such right.
• Requires lenders to use escrow funds for specified purposes.
• Specifies lender liability for closing or relocation costs for failure to comply with notice requirements.
• Specifies time restrictions on tenants or lessees bringing actions for damages.

Scott Coloney, president of the Foreclosure Response Team, added that if the tenant is awarded the first right of refusal, it could prolong short sales, which are already long, creating problems for buyers.

However, he did like the provision that requires the lender to give notice.

“It’s one less thing that the landlord has to do,” he said.

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