Public Advocate: Tenants continue to be pressured to leave homes because of foreclosures

 Many unaware they are protected by NJ law

NEWARK - The New Jersey Department of the Public Advocate has assisted tenants throughout New Jersey who were living in properties subject to foreclosure and faced eviction threats, utility shutoffs, and an array of other problems despite New Jersey's strong tenant-protection laws, Public Advocate Ronald K. Chen said today during a visit to the Episcopal Community Development Corp. here.

Flanked by community advocates and tenants who have received assistance from the Public Advocate to stay in their homes, Chen said: "As the wave of foreclosures in the nation continues, tenants remain vulnerable. Fortunately, New Jersey provides greater protections to tenants of foreclosed properties than any other state, but tenants need to know their rights in order to protect themselves and their families." 

Tenants are protected by the state's anti-eviction law, and cannot be evicted solely because the building has been in foreclosure and there is a new owner. 

"We launched our tenant protection project last year because it was apparent from calls we received that most tenants are unaware that they cannot be forced to move as a result of a foreclosure. The new owners also cannot force tenants out by creating dangerous living conditions, such as shutting off water or other essential utilities."

In late 2008, Chen and other state and local officials launched a campaign to notify tenants of their right to stay in their homes both during and after a foreclosure. Since then, the Department has worked closely with community organizations, local law enforcement, county sheriffs, the courts and the Office of the Attorney General to protect tenants' rights during foreclosures.  In addition, the Department has worked directly with more than 160 tenants from throughout New Jersey to help them protect their rights and has blanketed local agencies with more than 20,000 brochures that give tenants the information they need to protect their own rights.

"My instructions to every state agency have been clear.  During this national recession, our first priority must be to prevent or minimize economic hardship wherever possible. Armed with the proper information, families who are renting can fight back against inappropriate evictions and can remain in their homes," said Governor Jon S. Corzine, who reinstated the Department of the Public Advocate in 2006 to assist New Jersey residents in need.

In 1994, the New Jersey Supreme Court held that the state's Anti-Eviction Act protects tenants even when the property where they live is in foreclosure or has been foreclosed.

Despite this safeguard, many tenants are pressured to leave their homes, said Chen.  The Department's investigation found many instances in which lenders who acquired properties through foreclosure then hired agents - such as real estate professionals, property managers or attorneys - who contacted tenants in an effort to get them to leave. 

The Public Advocate has seen a range of improper tactics used by lenders and their agents.  Some make a "cash for keys" offer (if the tenants leave they will get money; the sooner they leave the more money they will get) without informing the tenants of their right to refuse the offer and remain in their homes.  Some lenders or their agents misrepresent the law by telling tenants they have to leave or face eviction, or attempt to collect rent that the tenant has already paid to the former owner.  The Department has been involved in many cases in which agents for the lenders contacted tenants repeatedly in an effort to get them to leave, even after tenants had stated that they wanted to remain in their homes.  These persistent and misleading pressure tactics cause some tenants to move out.

"When I told the bank that I know my rights and I have a right to stay, they didn't listen to me," said North Bergen resident Rosita Crooke. "But when I got the Public Advocate involved, they finally listened. More people need to know that help is available to them."

"I received a letter from the bank telling me that I had to leave my apartment immediately," said Newark resident Laura Battles. "The Public Advocate's office was able to sort things out for me almost immediately, and they stayed with the case. When the city turned off my water, the Public Advocate got the bank to pay the water bill. I didn't know where to turn but the Public Advocate was there to help me."

The Public Advocate is working with all types of utilities throughout the state to ensure that tenants don't lose vital services because of their landlords' failure to pay, said Chen.

"Banks don't want to be landlords and will assert pressure on tenants to move out of their homes.  It is important that tenants know they have rights," said Jose Ortiz, Esq. Deputy Director for Essex-Newark Legal Services, part of the state's legal services system coordinated by Legal Services of New Jersey (LSNJ).

The Public Advocate has also received 166 calls for assistance, 96 of which involved direct intervention by Advocate staff. Sixteen of those cases are still being actively worked on.  When a preliminary investigation reveals that real estate licensees, asset managers, or lawyers are sending misleading notices, the Public Advocate contacts them, warns them in writing of the unlawful nature of their actions, and sends the relevant information to the appropriate regulatory agency, such as the Real Estate Commission in the case of real estate licensees.

The means by which tenants are notified of foreclosure is often a problem, said Chen. "We have seen sheriffs who post or serve notices advising tenants - or ‘all occupants' - that they must vacate the premises because of a foreclosure.  We are working with the Attorney General's Office to educate the sheriffs about the law.

In addition, the Public Advocate has proposed a court rule that would require that residential tenants living in foreclosed properties receive notice of their rights before entry of a final judgment of foreclosure.  The Advocate is also working with legislative sponsors Senator Ronald L. Rice and Assembly Majority Leader Bonnie Watson Coleman, and a coalition of public interest organizations, to pass pending legislation that would provide tenants notice of their rights.

"People need to access the resources that are available to them. Too often, people reach out to us when they are already so far down the road that they are on the verge of homelessness," said Gerard Haizel, Executive Director of Episcopal Community Development. ECD also provides housing counseling and mediation assistance to homeowners on the verge of losing their homes to foreclosure. "Whether you are tenants or homeowners, the more information you have and the sooner you act, the easier it will be to protect yourself."

Staff from the Department of the Public Advocate have also met individually with CEOs of real estate companies and contacted law firms that specialize in representing lenders in foreclosure and eviction proceedings to ensure that they have a thorough understanding of the protections granted to renters under New Jersey tenants' rights laws.

And the Department has sent letters explaining the rights of tenants and the obligations of public officials to the mayor and chief of police of every municipality, county prosecutors, sheriffs, freeholders, and state legislators. 

Chen said that Legal Services of New Jersey, New Jersey Citizen Action, the New Jersey Tenants Organization, the Association for Children of New Jersey, and Housing and Community Development Network among others, brought the tenant eviction issue to his attention and that all of these organizations have had and continue to have interactions with people affected. 

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Click Here to View Tenant Foreclosure Project Case Histories.