McKinney-Vento Reauthorization

On April 2, U.S. House and Senate introduced the Homeless Emergency Assistance and Rapid Transition to Housing Act (or HEARTH Act)—a bill to reauthorize HUD's McKinney-Vento Homeless Assistance programs. The Senate bill (S. 808) was introduced by Senators Jack Reed (D-RI), Kit Bond (R-MO), and 11 other Senators. The House bill (H.R. 1877) was introduced by Representatives Gwen Moore (D-WI), Judy Biggert (R-IL), and 5 other House Members. The House and Senate bills are nearly identical to a version that passed the House last year, which itself was a compromise between a bill that passed the House Financial Services Committee in July 2008, and one that passed the Senate Banking Committee in September 2007.

The HEARTH Act will provide communities with new resources and better tools to prevent and end homelessness. The bill:

• Increases priority on homeless families with children, by providing new resources for rapid re-housing programs, designating funding to permanently house families, and ensuring that families are included in the chronic homelessness initiative.
• Significantly increases resources to prevent homelessness for people who are at risk of homelessness, doubled up, living in hotels, or in other precarious housing situations through the Emergency Solutions Grant program.
• Continues to provide incentives for developing permanent supportive housing and provides dedicated funding for permanent housing renewals.
• Grants rural communities greater flexibility in utilizing McKinney funds.
• Modestly expands the definition of homelessness to include people who are losing their housing in the next 14 days and who lack resources or support networks to obtain housing, as well as families and youth who are persistently unstable and lack independent housing and will continue to do so.

Latest News:
On May 19, both houses passed S. 896, the Helping Families Save Their Homes Act, which included the HEARTH Act as an amendment. President Obama signed the legislation into law on May 20. Click here to watch the Signing Ceremony.

Do you rent? Do you know your rights and how you can protect them?

 Ten Tips for Tenants

Know your rights when you rent a house or apartment.

1. Bring your paperwork.
The best way to win over a prospective landlord is to be prepared. To get a competitive edge over other applicants, bring the following when you meet the landlord: a completed rental application; written references from landlords, employers, and colleagues; and a current copy of your credit report.

2. Review the lease.
Carefully review all of the conditions of the tenancy before you sign on the dotted line. Your lease or rental agreement may contain a provision that you find unacceptable -- for example, restrictions on guests, pets, design alterations, or running a home business. For help reviewing your lease or rental agreement, see Signing a Lease or Rental Agreement FAQ.

3. Get everything in writing.
To avoid disputes or misunderstandings with your landlord, get everything in writing. Keep copies of any correspondence and follow up an oral agreement with a letter, setting out your understandings. For example, if you ask your landlord to make repairs, put your request in writing and keep a copy for yourself. If the landlord agrees orally, send a letter confirming this.

4. Protect your privacy rights.
Next to disputes over rent or security deposits, one of the most common and emotion-filled misunderstandings arises over the tension between a landlord's right to enter a rental unit and a tenant's right to be left alone. If you understand your privacy rights (for example, the amount of notice your landlord must provide before entering), it will be easier to protect them. For more information, see Tenants' Rights to Privacy and Repairs FAQ.

5. Demand repairs.
Know your rights to live in a habitable rental unit -- and don't give them up. The vast majority of landlords are required to offer their tenants livable premises, including adequate weatherproofing; heat, water, and electricity; and clean, sanitary, and structurally safe premises. If your rental unit is not kept in good repair, you have a number of options, ranging from withholding a portion of the rent, to paying for repairs and deducting the cost from your rent, to calling the building inspector (who may order the landlord to make repairs), to moving out without liability for your future rent. For more information, see the article Renters' Rights to Minor Repairs

6. Talk to your landlord.
Keep communication open with your landlord. If there's a problem -- for example, if the landlord is slow to make repairs -- talk it over to see if the issue can be resolved short of a nasty legal battle. Resolving Landlord-Tenant Disputes FAQ provides some advice.

7. Purchase renters' insurance.
Your landlord's insurance policy will not cover your losses due to theft or damage. Renters' insurance also covers you if you're sued by someone who claims to have been injured in your rental due to your carelessness. Renters' insurance typically costs $350 a year for a $50,000 policy that covers loss due to theft or damage caused by other people or natural disasters; if you don't need that much coverage, there are cheaper policies. For more information about renters' insurance, see the article Renters: Protect Yourself From Crime.

8. Protect your security deposit.
To protect yourself and avoid any misunderstandings, make sure your lease or rental agreement is clear on the use and refund of security deposits, including allowable deductions. When you move in, do a walk-through with the landlord to record existing damage to the premises on a move-in statement or checklist. For more information, see the article Protect Your Security Deposit When You Move In.

9. Protect your safety.
Learn whether your building and neighborhood are safe, and what you can expect your landlord to do about it if they aren't. Get copies of any state or local laws that require safety devices such as deadbolts and window locks, check out the property's vulnerability to intrusion by a criminal, and learn whether criminal incidents have already occurred on the property or nearby. If a crime is highly likely, your landlord may be obligated to take some steps to protect you. For more information on this subject, see the article Renters: Protect Yourself From Crime.

10. Deal with an eviction properly.
Know when to fight an eviction notice -- and when to move. If you feel the landlord is clearly is the wrong (for example, you haven't received proper notice, the premises are uninhabitable), you may want to fight the eviction. But unless you have the law and provable facts on your side, fighting an eviction notice can be short-sighted. If you lose an eviction lawsuit, you may end up hundreds (even thousands) of dollars in debt, which will damage your credit rating and your ability to easily rent from future landlords.

How Evictions Work: What Renters Need to Know

Landlords can't just lock you out, even if you are behind on rent. They must get a court judgment first.

Your landlord can't evict you without terminating the tenancy first. This usually means giving you adequate written notice, in a specified way and form. If you don't move after proper notice (or reform your ways -- for example, by paying the rent or finding a new home for the dog), the landlord can file a lawsuit to evict you. (This type of lawsuit is sometimes called an unlawful detainer, or UD lawsuit.) In order to win, the landlord must prove that you did something wrong that justifies ending the tenancy.

State laws have very detailed requirements for landlords who want to end a tenancy. Each state has its own procedures as to how termination notices and eviction papers must be written and delivered to you ("served"). Landlords must follow state rules and procedures exactly.

Notice of Termination for Cause

Although terminology varies somewhat from state to state, there are basically three types of termination notices that you might receive if you have violated the rental agreement or lease in some way:

• Pay Rent or Quit Notices are typically given to you when you have not paid the rent. These notices give you a few days (three to five in most states) to pay the rent or move out ("quit").
• Cure or Quit Notices are typically given to you if you violate a term or condition of the lease or rental agreement, such as a no-pets clause or the promise to refrain from making excessive noise. Usually, you have a set amount of time in which to correct, or "cure," the violation.
• Unconditional Quit Notices are the harshest of all. They order you to vacate the premises with no chance to pay the rent or correct a lease or rental agreement violation. In most states, unconditional quit notices are allowed only if you have:
  • repeatedly violated a significant lease or rental agreement clause
  • been late with the rent on more than one occasion
  • seriously damaged the premises, or
  • engaged in serious illegal activity, such as drug dealing on the premises.

Notice of Termination Without Cause

Even if you have not violated the rental agreement and have not been late paying rent, a landlord can usually ask you to move out at any time (assuming you don't have a fixed term lease) as long as the landlord gives you a longer notice period.

	Can our landlord kick us out so a family member can move in?

A 30-Day Notice to Vacate or a 60-Day Notice to Vacate to terminate a tenancy can be used in most states when the landlord does not have a reason to end the tenancy. (The length of the required notice can be slightly longer or shorter in some states.)

Rent Control Exceptions. Many rent control cities, however, go beyond state laws and require the landlord to prove a legally recognized reason for termination. These laws are known as "just cause eviction protection." (Tenants in only a couple of states -- New Jersey and New Hampshire -- also enjoy just cause eviction protection.)

Eviction Lawsuit

Following receipt of a termination notice, if you haven't moved out or fixed the lease or rental agreement violation, the landlord must properly serve you with a summons and complaint for eviction in order to proceed with the eviction.

Possible Defenses

If you do get hauled into court, you may be able to diminish the landlord's chances of victory. Perhaps you can point to shoddy paperwork in the preparation of the eviction lawsuit. Or maybe the landlord's illegal behavior, such as not maintaining the rental property in habitable condition, will serve as a good defense, as would a claim that the eviction lawsuit is in retaliation for your insistence on needed, major repairs.

Sheriff's Escort

Even if the landlord wins the eviction lawsuit, the landlord can't just move you and your things out onto the sidewalk. Landlords must give the court judgment to a local law enforcement office, along with a fee. A sheriff or marshal gives you a notice that the officer will be back within a few days to escort you off the property. At that point, it's best to acknowledge defeat and leave on your own steam.

Renters in Foreclosure: What Are Their Rights?

by Attorney Janet Portman

The sub-prime mortgage industry meltdown is now affecting renters whose landlords have lost their rental properties through foreclosure.

The mortgage industry crisis that started in 2006 has resulted in thousands -- no, make that millions -- of foreclosed homes. Most of the occupants are the homeowners themselves, who must scramble to find alternate housing with very little notice. They’re being joined by scores of renters who discover, often with no warning, that their rented house or apartment is now owned by a bank, which wants them out in a matter of days. For most of these renters, their options are bleak.

Who Are the Renters?

Renters who lose their homes to foreclosures don’t fit a single profile. Many of them live in smaller buildings, condos, and single-family homes. They’re located in cities and surrounding suburbs, in low-income and upscale neighborhoods. In short, foreclosed homes are everywhere, and they're rented by people with widely varying incomes, including some with “Section 8” (federal housing assistance) vouchers.

Who Are the Defaulting Owners?

The typical foreclosed home may have originally been owner-occupied, but more often it’s owned by investors and speculators who were hoping to profit from the rents. During the heyday of sub-prime mortgages -- when practically anyone who breathed and could sign their name could get a loan, usually with an adjustable rate -- these owners easily bought-up rental properties. They counted on rising rents and low interest rates to cover their mortgage payments. Caught between the slump in housing values and the rise of their mortgage interest rates, these owners could not feasibly sell nor extract enough rent to cover their monthly costs. In droves, they lost their investments. For example, in Minneapolis and its surrounding suburbs, 38% of the 2006 foreclosures involved rental properties; in Minneapolis alone, 65% were rentals.

Who Are the New Landlords?

When an owner defaults on a mortgage, the mortgage holder, often a bank, either becomes the new owner or sells the property at a public sale. If the bank becomes the owner, it may pay a servicing company to handle the property. But don't expect close attention -- these companies are focused on financial matters, not mundane things like maintenance.

Some renters find themselves with a new owner even before the foreclosure. Lawyers in Massachusetts, for example, contend that many new rental property owners are investment trusts that specialize in purchasing troubled loans directly from banks, then foreclosing, evicting, and selling.

Renters in Foreclosed Properties Lose Their Leases

Most renters will lose their leases upon foreclosure. The rule in most states is that if the mortgage was recorded before the lease was signed, a foreclosure will wipe out the lease (this rule is known as “first in time, first in right”). Because most leases last no longer than a year, it's all too common for the mortgage to predate the lease and destroy it upon foreclosure.

That doesn't always mean the lease-holding tenants have to leave immediately -- but those who remain join the ranks of month-to–month renters, all of whom can be terminated with proper notice, usually 30 days. And the new owners tend to move quickly to terminate, giving as little notice as is legally possible (sometimes no more than three days).

Tenants who refuse to leave face an eviction lawsuit, for which they usually have no legal defense. The impact of an eviction on a tenant's ability to find future housing can be devastating. No law prevents a future landlord from automatically rejecting tenants with evictions on their record, even when those tenants were the innocent victims of a foreclosing bank.

There are some notable exceptions, however, to this grim scenario. Tenants who participate in the federally financed Section 8 program will see their leases survive, as will tenants in New Jersey, New Hampshire, the District of Columbia, and, as of the end of November 2007, Massachusetts. In these states, new owners cannot evict lease-holding tenants unless the tenants have failed to pay the rent or violated any other important lease term or law. Tenants in other states who live in cities with rent control “just cause” eviction protection may also be protected.

Does It Make Sense to Evict Tenants?

New owners evict existing tenants because they believe that vacant properties are easier to sell. Common sense suggests otherwise. In many situations a building full of stable, rent-paying tenants will be more valuable (and command a higher price) than an empty building. Emptied buildings are also prone to vandalism and other deterioration – after all, no one is on site to monitor their condition. When entire neighborhoods become a wasteland of empty foreclosed multifamily buildings, their value drops even further. It’s hard to understand why new owners choose to pay lawyers to start eviction procedures instead of paying a modest fee to a management company to collect rent and manage the property while they wait to sell.

What Can a Foreclosed-Upon Tenant Do?

Renters whose states follow the “first in time, first in right” rule, where a lease can be wiped out by a foreclosure if the mortgage was recorded before the lease, will not be able to convince a court to change that rule. But tenants who learn that their new landlord is a bank can at least lessen the financial consequences by suing the former owner. Here’s how it works.

After signing a lease, the landlord is legally bound to deliver the rental for the entire lease term. In legalese, this duty is known as the “covenant of quiet enjoyment.” A landlord who defaults on a mortgage, which sets in motion the loss of the lease, violates this covenant, and the tenant can sue for the damages it causes.

Small claims court is a perfect place to bring such a lawsuit. The tenant can sue for moving and apartment-searching costs, application fees, and the difference, if any, between the new rent for a comparable rental and the rent under the old lease. Though the former owner is probably not flush with money, these cases won’t demand very much, and the judgment and award will stay on the books for many years. A persistent tenant can probably collect what's owed eventually.

Press for Legislative Reforms

Why should hapless tenants suffer the consequences of risky lending practices engaged in by others? States besides those mentioned above can enact legislation to protect tenants. On the federal level, some action is already under way. HR 3915, The Mortgage Reform and Anti-Predatory Lending Act of 2007, would not only tighten up the mortgage industry, but provide that tenants’ leases would survive foreclosure, and that month-to-month tenants would be entitled to 90 days’ termination notice.