OPED FROM PUBLIC ADVOCATE RONALD K. CHEN ON TENANTS AND FORECLOSURE
By Ronald K. Chen
New Jersey Public Advocate

The foreclosure tidal wave sweeping the nation has arrived in New Jersey and is taking some unexpected – and unnecessary – victims.

At the Department of the Public Advocate, we have learned that tenants who rent properties that are subject to foreclosure are being kicked out of their homes when the bank takes over the property.

Make no mistake: this practice is almost always illegal in New Jersey.
In 1994, the New Jersey Supreme Court held that the New Jersey Anti-Eviction Act protects most tenants from eviction even when the property where they live is in foreclosure or has been foreclosed.

In other words, under New Jersey law, a tenant in good standing comes with the property when the property changes hands because of a foreclosure.

Moreover, the Unlawful Eviction Act of 2006 makes it an offense under the criminal justice code for a person who has been forewarned by a public official even to attempt to evict a tenant except by lawful court proceedings.

This law prohibits, not only threats and violence, but also the use of words or actions that have the clear intention to incite fear of danger in the tenants; removal from the premises of the tenant’s personal property; padlocking or changing the locks on the property; or shutting off utilities, such as heat, electricity, or water.

Despite these legal protections, I have recently seen copies of notices and letters sent to tenants that imply, or state outright, that they must leave because of a pending or completed foreclosure. These notices warn that the locks will be soon be changed, or that the tenants’ possessions may be removed. Universally, the notices demand that the tenants make immediate contact with the lender’s representative to discuss possible relocation assistance or eligibility for a “cash for keys” program – all predicated on the tenants’ vacating within a very short time frame.

With the number of foreclosures expected to reach as high as 60,000 in the coming year, triple the number processed in 2005, thousands of New Jersey renters could be coerced into leaving their homes even though they are protected by New Jersey’s tenants’ rights laws.

In New Jersey, foreclosures have more than doubled in the last three years from a total of 23,044 in 2006, to 34,457 in 2007 and 47,989 in 2008. It is estimated that foreclosures could increase to as high as 60,000 this year, according to figures compiled by the NJ Administrative Office of the Courts.

Unfortunately, many tenants are not aware they have a right to stay in a property that is changing hands as a result of foreclosure.

That is why the Department of the Public Advocate, working in cooperation with the New Jersey Department of Banking and Insurance, Legal Services of New Jersey, the New Jersey Tenants’ Rights Organization, New Jersey Citizen Action, and local officials, has launched an education campaign to inform tenants of their rights and to make sure that the professionals dealing with this issue – from local police to real estate professionals to attorneys – don’t coerce tenants into leaving properties they are lawfully occupying.

As part of this outreach campaign, the Department of Banking and Insurance, which licenses real estate professionals through the New Jersey Real Estate Commission, sent a bulletin to all real estate licensees reminding them of their obligation to fully explain protections included in New Jersey law.

I have also sent letters to real estate firms and asset management companies putting them on notice that their activities may be illegal and that their licenses to work in New Jersey could be put at risk if they continue to pressure tenants to leave properties solely because they are in foreclosure.

Finally, I urge anyone who believes they are being forced from their rental property to contact the Department of the Public Advocate, Office of Citizen Relations, at 609-826-5070 so that we can investigate your situation and see if there is relief available to you.

Additional information on this issue is available at the New Jersey Department of the Public Advocate website at www.njpublicadvocate.gov.

Ronald K. Chen became the first Public Advocate of New Jersey in 13 years when the Department of the Public Advocate was restored in 2006. He provides advocacy for at-risk children, elder citizens, people with disabilities, mental health consumers and ratepayers and is given standing to represent the public interest in legal proceedings.