Crystal Johnson had no idea her landlord had financial trouble until police taped an eviction notice to the door of her Sandy Springs condominium in June.

About a year into her two-year lease, Johnson faced the prospect of being forced out of her home because a bank had foreclosed on the landlord, who was in default on a loan.

“They treated me like I was in default,” Johnson, a music producer and songwriter, said. “But I wasn’t in default.”

As banks and finance companies seize an expanding portfolio of residential properties through foreclosure, tenants can find themselves facing eviction from their homes.

A federal law enacted in late May, however, has eased the pain for renters such as Johnson, a single mother raising her high school aged daughter and a nephew.

Under the Protecting Tenants at Foreclosure Act, a renter who had a lease in place prior to the landlord going into default has a right to stay for at least 90 days, or longer if the foreclosing party has no buyer who plans to make the home their primary residence.

Even if the foreclosing party has such a buyer, the tenant must be given 90 days’ notice to vacate. The same holds true for foreclosed properties sold at auction, and for renters of Section 8 housing.

Johnson and EMC Mortgage Corp., which owned the mortgage to her landlord’s condo and took possession of the home, finally settled the case in housing court on Oct. 20. EMC, which initially wanted her out of the property, agreed to honor the remainder of her lease. The company, a subsidiary of JPMorgan Chase & Co., did not return calls seeking comment.

It’s difficult to gauge how many tenants in Georgia have faced eviction because of landlord foreclosure, as courts don’t generally track them.

Nationally, more than 20 percent of properties in foreclosure are rentals, according to a December 2008 study by the National Low Income Housing Coalition, an advocacy group. The study also says rentals are typically mutli-family dwellings and that renters are about 40 percent of all families facing eviction.

That would mean a significant chunk of the 51,000 tenant eviction cases tried last year in Fulton County — the state’s busiest in such disputes — were foreclosure-related.

Judge Louis Levenson, who presides over landlord-tenant cases in Fulton County State Court, said the Act is a welcome tool in handling disputes.

Levenson said he hears an average of 20 to 30 such cases a week now, about half the number he saw earlier in the year, before the law took effect.

“As a judge, it was very difficult to feel comfortable with the inequity that was created for people who really were not at fault,” Levenson said.

Prior to the law, tenants had few rights in landlord foreclosures, said Tamara Serwer Caldas, managing attorney for the Atlanta Volunteer Lawyers Foundation. Caldas represented Johnson in her eviction fight.

“All we could say to callers beforehand was to explain to them what their legal position was and explain to them that they needed to get another place very, very quickly,” Caldas said.

If the landlord defaulted on his mortgage, any rights a tenant had under a lease were voided by the foreclosure, Levenson said.

“The blameless tenant would be cut off and evicted from the property and the time from foreclosure to eviction of the tenant could be as quick as 30 days,” the judge said.

But while the law has helped, advocates said, it hasn’t fixed the issue entirely.

For one thing, the law is so new that many tenants aren’t aware of their rights, said Cathy Vandenberg, managing attorney for the Cobb County office of Atlanta Legal Aid in Marietta.

And banks, who aren’t keen on becoming rental landlords, don’t always volunteer the law’s provisions to the tenant, she said.

“After you approach them and ask questions about the new law, then they’re willing to talk,” Vandenberg said.

Johnson said she learned about the law from her beautician, who saw a television news broadcast about it. It was part of broader legislation dealing with foreclosure mitigation.

Even then, she said, only two of 15 lawyers she called for advice knew about it.

“I really had to fight; I didn’t understand how this was happening,” Johnson said. “I knew I had my rights but they weren’t being enforced. I didn’t know if the marshals were going to be coming to my door. It was a very frightening time for me.”

Some institutions will try to entice tenants to leave quickly by offering cash incentives, especially if the property is in an area where sales are steady.

These so-called cash-for-keys deals are conditional, often requiring the tenant to move out before they get the money, with the amount based on how fast they leave.

“It may work for some tenants, but the tenants should be able to weigh all of their options,” said Maggie Kinnear, who heads the landlord tenant hotline for Atlanta Legal Aid’s downtown office.

Johnson said she was offered $700 by the bank that foreclosed on her landlord to leave the condo immediately. She refused and wound up going to court.

Generally, tenant evictions haven’t been an issue with commercial real estate because the bank or entity taking possession wants to keep rental income coming in, said Jim Ludlam, an attorney in the real estate and finance group at McKenna Long & Aldridge in Atlanta.

“Most of the time in office and retail what you want is to keep the tenants in place and make them happy,” Ludlam said. “When a bank or somebody purchases a foreclosure, generally speaking, they want to deal with a party who is a tenant. They want to keep operating income coming in.”

As the inventory of foreclosed homes builds, some banks are taking a similar stance with residential properties, he said.

Keeffe McSweeney, co-owner of Partners Management in Atlanta, which manages residences all over the metro area, said the number of renters in condos swelled as condo sales slowed, prompting many owners to rent out their units.

McSweeney said the calls he gets from renters facing eviction because of landlord foreclosures have begun to stabilize from a few months ago.

One reason is the new federal law. Another, he said, is that more lenders are working with renters to “let the tenant stay in the property if they are paying and paying on time.”

-- Michelle E. Shaw contributed to this article.

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Protecting Tenants Act at a glance

The law, which was part of broader foreclosure mitigation legislation enacted in May:

● Requires that tenants have at least 90 days to vacate if their landlord is foreclosed on.

● Adds that they can stay longer under terms of the lease if the property owner has no one ready to buy the home and make it their primary residence.

● Does not prevent tenants and property owners from agreeing on so-called cash-for-keys deals in which the tenant leaves sooner in return for money.