On 5/20/09, President Obama signed a bill imposing new federal restrictions on eviction notices after foreclosure.  The new law essentially states that buyers of residential property at foreclosure take title subject to  “bona fide leases” that were entered into “before the notice of foreclosure”.  The law does not specify which “notice of foreclosure”  is intended.   If no lease existed, bona fide tenants that were at-will or on month-to-month tenancies may be terminated only by service of a written 90-day notice (which includes the shorter 30 or 60 day notice required under California Code of Civil Procedure sections 1161a(c) and 1161b).  If the buyer intends to occupy the property as his primary residence, a 90-day notice may also be served to terminate a fixed term lease.

Under the new law, a lease or tenancy shall be considered bona fide only if–(1) the trustor or the child, spouse, or parent of the trustor is not the tenant; (2) the lease or tenancy was the result of an “arms-length transaction”; and (3) the lease or tenancy requires the receipt of rent that is not substantially less than fair market rent for the property (unless the rent is subject to subsidy).  This is designed to prevent fraud, but can easily be circumvented.  Having never met the occupants, it is difficult, if not impossible, for a foreclosure buyer to prove that a lease to a brother or sister or friend is not “bona fide”.  Whether a lease or tenant is bona fide is a question of fact for the court to decide.  Unfortunately, the buyer is forced to make the decision as to which notice to serve before filing suit.  This means that buyers will likely serve 90-day notices even when they believe the tenancy is not bona fide.  There is no requirement in the law for the tenant to provide evidence of his or her tenancy or otherwise cooperate with the new owner to determine what notice to serve.

Thus, while this legislation is presumably well-intended, it is ill-conceived and poorly written.  It strikes against legal precedent and property rights and forces foreclosure investors to become landlords for properties they have, in most cases, never been inside of, and for tenants they have never met and did not know existed.  Under prior law, tenants assumed the risk that the property would not be lost in foreclosure, or if foreclose occurred that they would have to move.  After all, rental housing is, by definition, temporary.  Now, the buyer loses traditional rights of ownership and is forced to assume the risks of being stuck with a bad or fraudulent tenant or being bound to an unrecorded long-term lease.  No responsibility is placed on the former landlord or the tenant to protect themselves or potential buyers (such as requiring that the lease be recorded before the foreclosure sale to put buyers on notice).  This is wrong; however, foreclosure investors garner little sympathy.  What many fail to realize is that when foreclosure buyers lose protection over their purchases, they buy and bid less, which in turn results in bigger defaults, less rehabilitation of neglected properties, and less money for the person losing their home in foreclosure.  Protections for investors have a purpose and should not be dispensed with for “feel good” legislation.   Reform is fine, but it should fair and clear.

Although this new law is not clear and has yet to be tested, it does imply that rent must be paid to the new owner as a condition for occupancy.  Consequently, under this federal law, the new owner appears entitled to serve a notice to pay rent or quit upon anyone claiming to be a tenant in the property.  Unfortunately, they may be forced to take the tenant’s word for what rent is owing.  If a tenant fails or refuses to share his or her rental information with the new owner, there may be difficulties in enforcing the obligation.  Even when rent is determined to be owing, the new owner may find itself with an implied warranty of habitability defense where there has been deferred maintenance on the property.  These are just a few of the flaws in this new legislation.

In light of these many pitfalls, foreclosure buyers are advised to seek legal counsel, on a case-by-case basis, whenever a tenancy might exist.  In some cases it may be possible to shorten the length of the notice if the former owner shares the property, has rented to a relative, or the purported tenant is presenting a suspicious rental agreement.

Science Fiction may not seem a likely place to find truth; however, the latest blockbuster, Terminator Salvation, reminds us that our heart is the key to resisting oppression.

The movie opens with Christian Bale as a grown-up John Conner.  He is the voice and leader of the Resistance in man’s war against the machines.  Despite the ravages of war, we find the most battle-hardened soldiers still retain their humanity.  Ultimately, sacrifices are made so that John Conner, the heart of the Resistance, will survive. 

The heart symbolizes hope, humanity, and courage.  It has always been so.

In 1605, as the Stewarts regained the throne, James I of England passed a Decree of Uniformity requiring all religions to submit to him or suffer persecution via “Star Chamber” inquisitions.  Charles I and II later stepped up the persecution and Presbyterians and Puritans united in opposition, forming a Resistance.  Claiming under the “Divine Right of Kings”, Charles attempted to seize absolute control and raise taxes, ultimately dismissing Parliament.

Then, in 1637, a simple Scottish cow-maid named Jenny Geddes launched a riot in the church at St. Giles when she stood up and threw her stool at the Dean who had been sent to read from the King’s new Book of Common Prayer.  One fed-up woman and the “throwing of a stool” launched a civil war for Scottish independence.  Like Rosa Parks, or our own Boston Tea Party, this was a “War for Independence”. 

Nevertheless, Jenny Geddes, Rosa Parks, and our Founding Fathers were not “revolutionaries”, nor did they see themselves as such.  Revolutions are led by radicals bent on destroying the the natural social order.  Jenny Geddes, Rosa Parks, and our Founding Fathers—like John Conner–were resistance fighters trying to preserve their inalienable, God-given rights and culture, according to the beliefs they held dear.  They fought back because their consciences were being violated.  They were not radicals or revolutionaries–they were conservatives and patriots, and, in most cases, Christians.  They did not fight back because they wanted to–they fought back because they were being oppressed beyond the point their consciences could bear–they fought back because they had heart!  Change was thrust on them and they said, “No.” 

In Terminator Salvation, the machines represent oppressive conformity that is the destruction of humanity.  The Resistance is led by men and women with the heart to say “No” to tyranny and oppression.  In similar fashion, our Founding Fathers were not radicals bent on overthrowing authority, destroying the rule of law, redistributing property, or violating the God-given rights of men (as in the French, Russian, Chinese, or numerous Latin American Revolutions).  On the contrary, they fought in defense of such principles of liberty and freedom.  The Declaration of Independence was not a revolt against authority; rather, it was a legal indictment against the King of England brought my free men before the Court of Conscience, based upon his violations of the rights of men to “Life, Liberty, and the Pursuit of Happiness”.  In short, it was the invocation of God-given rights by free men of tremendous courage, principle, and faith.

At the heart of the Resistance that is “Humanity”, is a heart for freedom, a love for the rights of property, and respect for the rule of law.  This was the heart of our Founding Fathers.  This is the heart of a patriot.

Historical Note:  On this day in 1777, the Continetal Congress adopts the Stars & Stripes during America’s War for Independence; on this day in 1849, California declares its independence from Mexico; and on this day in 1954, President Eisenhower signs an order adding the words “under God” to the Pledge of Allegience.

The Pillars of the Earth, by Ken Follett, is an epic historical novel about the construction of a fictional cathedral in 12^th Century England.  In such story, the cathedral becomes the center and lifeblood of the medieval village; thus, the architectural metaphor, Pillars of the Earth.  While it is true that the great cathedrals were central in the lives and hearts of medieval towns, this reference comes from Scripture.

In 1 Samuel 2:8, it is written:  He maketh poor and maketh rich, He bringeth low and lifteth up: He raiseth up the poor out of Dust, and lifteth up the Beggar from the Dunghill; to set them among Princes, and make them inherit the Throne of Glory; For the Pillars of the Earth are the Lord’s, and He hath set the World upon them.

Such reference is part of a prayer of praise by Samuel’s mother, Hannah, and clearly does not refer to literal architecture.  Rather, her prayer praises God for His sovereignty, power, and stability, and recognizes God as the creator and sustainer of all things.  Therefore, it is God who deserves the praise, not the cathedrals built in His honor. 

So, what are the “pillars” upon which God sets the world?  While “pillars” may simply be a metaphor for God’s supernatural will, the context indicates that it may also be those persons God has lifted up as leaders. 

In a pre-revolutionary era sermon (Boston, 1730), Preacher Benjamin Colman makes the case that pillars are the government and rulers whom God as elevates to power.  As pillars, our leaders are expected to be strong and supportive.  Like pillars, they are supposed to have integrity and to add dignity and order to the structure of government.

These pillars “are the Lord’s”.  “He removes kings and raises up kings” [Dan. 2:21].  With this knowledge, let us honor our worthy rulers, but let our leaders be humble before God, just as we are careful not to put our trust in men.  “In God we Trust” is not only our national motto, it is the pillar upon which our nation was founded.

Note:  The National Day of Prayer is a day designated by Congress in 1952 for Americans to come together and pray for each other and our country.  It was fixed on the first Thursday in May by President Ronald Reagan.

We think we live in turbulent times, and perhaps we do, but consider the Middle Ages.  The Other Boleyn Girl, just released with Natalie Portman, as Anne Boleyn, and Scarlett Johansson, as her sister, Mary, reminds me how good we have it.  In the 16^h Century, government was largely controlled by corrupt and capricious kings, religion was dominated by an equally corrupt Roman Catholic Church, selling indulgences, relics, and special dispensation, and the people were largely illiterate, without even a Bible in their own tongue.

Along comes Anne Boleyn.  Her seduction of King Henry (and her failure to give him a male heir) ultimately led to the loss of her head (for which she is most remembered), but it also inadvertently spurred King Henry to break from the Roman Catholic Church, embrace the Protestant movement, and approve the publication of the first Bible in English, which opened the door for the Reformation and the revitalization of Western Civilization.

William Tyndale, considered the “Architect of the English Language” and the leader of the Reform Movement, was burned at the stake in 1536, after being hunted by the King’s men for 11 years, for translating and printing the first New Testament in the English language. Tyndale’s last words were, “Oh Lord, open the King of England’s eyes”.  This prayer was answered just three years later in 1539, when King Henry finally allowed, and funded, the printing of an English Bible known as the “Great Bible”.  Ironically, this Bible was published by Tyndale’s close friend, Myles Coverdale, and used much of Tyndale’s work!  While King Henry’s change of position was likely intended to spite the Pope for refusing his divorce in order to marry Ms. Boleyn, it is astonishing to see how God uses even the treachery of men to advance His divine purposes.  Proof that God’s providential hand is active in the affairs of man.

Historical Note:  King Henry VIII’s defiance of Rome also resulted in English dominance in the New World.  After Henry’s excommunication in 1533, every Roman Catholic crew was given full Papal sanction to attack English ships.  In response, Henry modernized his fleet and naval tactics.  In 1539, King Henry’s shipmate friend, Fletcher of Rye, invented the nautical art of “tacking”.  Never before had a ship been able to sail against the wind.  Following Henry’s death, Catholic persecution of Protestants increased, making the New World an attractive alternative for religious freedom.  Ironically, it was Queen Elizabeth, the unwanted daughter of Anne Boleyn, who defeated the Spanish Armada and gave the English dominance over the Seven Seas and the coastline of America.  

On this day in 1937, Saddam Hussein was born.  On this day in 1945, Dictator, Benito Mussolini, was executed in Italy.  Saddam Hussein was executed in his own right in 2006.  Both were lauded for their early economic reforms and government control.  Both were hanged in disgrace.

Ever wonder what would happen if entrepeneurs and business creators went on strike?  Ayn Rand explores this concept in her magnum opus, Atlas Shrugged.  A great read and defense of capitalism.  While Rand overplays her argument in some areas (mainly religion), Atlas Shrugged is thoughtful reading at a time when many want to blame business for our current economic woes.

Ayn Rand is correct that we should value our thinkers and creators, but quitting is not the solution.  When confronted by sour economic forecasts, crisis and negativity, true visionaries and entrepeneurs soldier on all the harder.  Paul Johnson submitted an article to Forbes in 2006, called “The Rhino Principle”, where he praised the single-minded determination of the this armored antediluvian quadruped.  When people tell you that you can’t succeed or place obstacles in your way, learn from the rhino and charge at it again and again until you achieve your objective.   Do not be discouraged.  Be a rhino.  Charge on!

Historical Note:  On this day in 1953, Winston Churchill was knighted by Queen Elizabeth II.  Love him or hate him, Churchill was a rhino.

February 26, 2009:  In the wake of 9% jobless figures, the banking, foreclosure, and credit crisis, and a continued drop in all economic indicators, President Obama signs a Economic Stimulus/Spending Bill of historic proportions.  The sheer size of this bill will require an escalation in the tax rates that will lead to further deflation in the economy.   The economic “bottom” is projected to be 18-24 months, with a slow recovery following.  Obama is counting on the “wealthy” to bail out the country.  However, it is hard to see how taxing job creators will stimulate a recovery.  Since the government is not willing to cut spending, expect higher taxes across the board, including property taxes.  Political fallout will likely follow.

Interesting notes:  On this day in 1802, French writer, Victor Hugo, was born.  His most noted work, Les Miserables, celebrated the revolution of the lower classes in a fight for social justice.

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