The "Just Cause" law passed in Rhode Island works to benefit tenants in homes that are being foreclosed upon. The law prevents foreclosing lenders to evict tenants only to board up the home while a new owner is found.

What is the Just Cause law?

Rhode Island's newest tenant law, the Just Cause law, protects those renting in one to four unit properties that have been foreclosed on by large lenders. These large lenders will assume the responsibility of landlords when they foreclose on properties.

Due to their status as landlords, a lender cannot evict a tenant just because of the possession of the home has switched. "Just cause" for eviction needs to be established, such as not paying rent.

It is estimated that around 40% of Rhode Island families rent their homes and home foreclosures are a huge problem in the state.

Some effects that evicting tenants can have include:

• Schools risk becoming under-utilized
• Families run an increased risk of homelessness
• Local businesses lose customers
• Vacant buildings attract vandalism
• Property value drops

Evictions caused by property foreclosures are not completely eradicated, as evictions can still occur in buildings that violate housing codes and have purchase-and-sale agreements included in the foreclosure.

Bank Representatives Oppose Law

Representatives for the banks have opposed the law, noting that the likelihood of selling a property greatly decreases when tenants still reside in the building. They also argue that banks and other lenders are not equipped to be landlords since their expertise is in the business of handling money, not people. They also state that they are not prepared to handle landlord duties, such as clearing snow and fixing toilets.

However, there are a few exemptions that allow banks to maneuver around the law. Smaller lenders, classified as those that foreclose on less than 15 properties per year in the state, are exempt from the law. Banks that are headquartered in Rhode Island, have Rhode Island staff with the authority to approve loan restructuring, and process their own mortgage payments are also exempt.