On August 7, 2010,  Chapter 258 of the Acts of 2010 , An Act Relative to Mortgage Foreclosures ("Chapter 258" or "the Act") was signed into law. The new law establishes protections for tenants in foreclosed properties as follows:

Just Cause Eviction: The Act prohibits a tenant from being evicted from a rental unit for dwelling purposes after a foreclosure sale except for "just cause". The Act establishes M.G.L. Chapter 186A, which governs just cause evictions, including the procedures that must be followed to evict a tenant after foreclosure. A foreclosing owner could only evict a tenant:

  • for failing to pay the rent in effect prior to foreclosure, or use and occupancy charges, as long as the foreclosing owner notified the tenant in writing of the amount of rent or the amount of use and occupancy that was to be paid, and to whom it was to be paid;
  • for a material violation of an obligation or covenant of the tenancy, and failing to correct the violation within 30 days of a written request;
  • for committing a nuisance in the unit or causing substantial damage to the unit or interfering with the right of quiet enjoyment of other tenants-or allowing someone else to do these things;
  • for using the unit for illegal purposes-or permitting someone else to do this;
  • for failing to extend or renew a lease in writing, on written request;
  • for refusing the foreclosing owner reasonable access to the unit; or
  • if a binding purchase and sale agreement has been executed for the property with a bona fide third party purchaser.

A lease or rental agreement must be bona fide-the subject of an "arm's length" transaction, and the rights listed above do NOT extend to lessees who are the mortgagor, or the child, spouse, or parent of the mortgagor.

A foreclosing owner cannot evict until at least 30 days after posting a notice in the building and delivering it to the tenants, telling such tenants the names, addresses, telephone numbers for the foreclosing owner or management responsible for the building, and an address to which rent/use and occupancy payments must be sent.

If the foreclosing owner disagrees with the amount of rent or use and occupancy rates that a tenant is paying, the foreclosing owner can and must bring an action in court to claim that the rent is unreasonable and set a new rate. Bona fide lease rates or proofs of rental payment are presumed reasonable.