Post-Foreclosure Eviction: the New Owner Guide to Vacant Possession

The post-foreclosure eviction process begins with a threshold question about the legal validity of the foreclosure sale itself, because the new owner's right to possess the property depends entirely on the validity of the title acquired at the foreclosure sale, and a former owner who can demonstrate that the foreclosure was conducted in violation of the applicable state procedural requirements, that the notice of default or notice of sale was defective, or that the foreclosing lender violated the applicable requirements of the deed of trust or mortgage instrument may be able to challenge the validity of the foreclosure sale as a defense to the eviction proceeding. Eviction-after-foreclosure and foreclosure-defense counsel can evaluate whether the foreclosure sale was conducted in compliance with all applicable state procedural requirements and produced a valid and marketable title in the purchaser, assess whether any defect in the foreclosure process creates a defense to the post-foreclosure eviction, and advise on the most expedient legal pathway for the new owner to obtain possession of the property.

The former owner-occupant who remains in possession after the foreclosure sale is classified as a holdover occupant under the applicable state civil procedure code, and the new owner is required to serve a notice to quit on the holdover occupant before commencing an unlawful detainer action, and the most common notice period applicable to a former owner after a foreclosure sale is three days under California Code of Civil Procedure Section 1161a and similar statutes in most other states, and the notice must be served in the specific manner required by the applicable statute, which typically includes personal service, substituted service, or posting and mailing. Home-foreclosure and foreclosure-and-real-estate-default-services counsel can advise on the specific notice requirements applicable to the post-foreclosure eviction of a former owner-occupant, assess whether the notice to quit served on the holdover occupant satisfies all applicable form, content, and service requirements, and develop the legal strategy for obtaining a writ of possession through the most expedient available procedure.

The table below identifies the four principal occupant categories that arise in post-foreclosure eviction cases, the governing law applicable to each category, the required notice period, and the primary legal proceeding available to the new owner.

Tenant-eviction and good-cause-eviction-law counsel can advise on the specific legal standards applicable to determining whether a tenant occupying a foreclosed property qualifies as a bona fide tenant entitled to PTFA protections, assess whether the tenant's lease was entered into at arm's length for legitimate rental purposes and at market rent before the notice of foreclosure was filed, and develop the legal strategy for managing the PTFA-protected tenancy.

The Protecting Tenants at Foreclosure Act, which was permanently enacted in 2018, requires the new owner of a foreclosed residential property to provide any bona fide tenant with at least ninety days advance notice before requiring the tenant to vacate, and the PTFA also requires the new owner to honor any existing bona fide lease until the end of the lease term, subject to the right to terminate the tenancy upon at least ninety days notice if the new owner intends to occupy the property as a primary residence, and the new owner who fails to comply with the PTFA's requirements may be subject to federal civil liability and state law claims. Landlord-tenant and new-york-tenant-rights counsel can advise on the specific notice requirements applicable to the termination of a PTFA-protected tenancy, assess whether the new owner has complied with all applicable federal and state notice requirements before commencing an eviction proceeding, and develop the legal strategy for managing the transition from the PTFA notice period to the post-notice eviction proceeding.

The unlawful detainer action is the judicial proceeding through which the new owner of a foreclosed property obtains a court order requiring the holdover occupant to vacate, and in most states the unlawful detainer action must be filed in the local superior court or county court, the summons and complaint must be personally served on the holdover occupant, the occupant has the right to file a written response within the applicable state's response period, and the court conducts a trial at which the new owner must prove the validity of the foreclosure sale and the service of the required notice to quit. Unlawful-eviction and civil-court-proceeding counsel can advise on the specific procedural requirements applicable to an unlawful detainer action against a holdover occupant of a foreclosed property, assess whether the new owner has satisfied all pre-filing requirements including service of a valid notice to quit and expiration of the required notice period, and develop the unlawful detainer complaint and supporting evidence strategy.

Cash for keys is a voluntary negotiated agreement through which the new owner offers the holdover occupant a cash payment in exchange for the occupant's prompt and voluntary vacation of the property and delivery of the keys in good condition, and the primary advantage of a cash-for-keys agreement over the unlawful detainer litigation process is speed and cost, because a successful cash-for-keys negotiation can achieve vacancy in days rather than the weeks or months that the unlawful detainer process typically requires. Real-estate-litigation and real-estate-civil-lawsuit counsel can advise on the specific legal standards applicable to a cash-for-keys agreement, assess whether the proposed agreement adequately protects the new owner's title and provides sufficient consideration to ensure the voluntary departure of the holdover occupant, and develop the cash-for-keys agreement terms that most efficiently achieve the new owner's possession goal.

After the new owner obtains a default judgment or trial judgment in the unlawful detainer proceeding, the court will issue a writ of possession upon the new owner's application, and the writ of possession authorizes the county sheriff to physically remove the holdover occupant from the property if the occupant does not voluntarily vacate within the time period specified in the writ, which is typically five days in California and similarly short periods in most other states. Real-estate-dispute-resolution and real-estate-laws counsel can advise on the specific legal standards applicable to a writ of possession application in the applicable jurisdiction, assess whether the new owner has obtained a valid judgment for possession in the underlying unlawful detainer proceeding, and develop the writ of possession enforcement strategy for coordinating with the sheriff's office to achieve a lawful and efficient physical eviction.

The holdover occupant who refuses to vacate after the sheriff serves a lockout notice pursuant to the writ of possession is subject to physical removal by the sheriff on the date and time specified in the lockout notice, and the new owner who is present at the scheduled lockout should have a licensed locksmith available to rekey the property immediately after the sheriff executes the writ and the occupant's belongings are removed, and the new owner should document the condition of the property at the time of the lockout with photographs and video to preserve evidence of any damage caused by the holdover occupant. Plaintiffs-rights and certified-eviction-notice counsel can advise on the full range of legal remedies available to a new owner whose holdover occupant has refused to vacate after receiving a valid notice to quit and losing an unlawful detainer judgment, assess whether the occupant's continued refusal to vacate creates additional legal liability, and develop the integrated enforcement strategy for achieving final possession with minimum cost and delay.