So, here we go again, looking at the negative aftereffects of a law instituted to protect tenants and abandoned properties. To sum up, the federal Protecting Tenants in Foreclosure Act, PTFA, was put into place with the intention of protecting neighborhoods and on-property tenants from declining property value and safety of foreclosed or abandoned properties. The law requires abandoned properties to be maintained for aesthetic and safety reasons, including heat or repairs. Since its inception, many states have adopted similar laws in the hopes of maintaining the still-flagging property values for neighboring homeowners.
While the specific criteria of each state’s law 
differs to some degree, oftentimes the law applies for properties that have been abandoned completely and stand empty or those rental properties that are occupied by a tenant and abandoned by the mortgager.
Who is going to pay to maintain these properties? Tenants’ responsibility is limited by their rental contracts and with mortgagers abandoning or foreclosing their properties in the light of the protracted economic crisis, the mortgage holding banks and lenders are the effective “third signer” on this blank check for property maintenance.
The banks and lenders are only responsible until the foreclosure process is complete, which may have been the one criteria overlooked in the implementation of this law. The combination of bankruptcy and foreclosure tends to mean a long-drawn out legal process, extending the lender’s responsibility for maintenance on the property.
There are a multitude of issues that come along with lenders having the extended burden of property maintenance, least of all being extensions of funds that are seemingly tight to begin with. Again, we are seeing proof of reduced responsibility on the part of property owners; again we are seeing a bailout with limited view of the actual results.
There needs to be serious consideration for adoption of this type of law for any state. Stipulations need to be put into place to limit the financial burden on the mortgage holding banks, while still maintaining properties for safety purposes. With no way to speed up the foreclosure or bankruptcy process, new options must be researched before running down this new would-be slippery slope.
Tags: banks and lenders, economic crisis, foreclosing, foreclosure process, homeowners, legal process, maintenance on the property, mortgagers, property values, Protecting tenants in foreclosure act, PTFA, rental contracts, tenants responsibility
