For an investor or homebuyer looking to purchase a tenant occupied property, a constant issue of concern is whether the tenant will leave in time to coincide with plans to live at the property, re-rent the property, or satisfy potential resale purchasers. This concern is compounded when the property is purchased at a foreclosure sale, and an August 2012 Maryland Court of Appeals ruling might have just made matters worse.
With passing of the Protecting Tenants at Foreclosure Act in 2009 and the Maryland state law equivalent in 2010, federal and state lawmakers decided that when the foreclosure purchaser is entitled to possession, residential tenants must be given at least ninety (90) days written notice to vacate. Ok, fair enough right? At the end of the ninety (90) days, the new owner gets possession, and life goes on. Well…not so fast! What if the tenant does not leave?
The first issue that arises in this situation is the fact that in most instances, short, summary ejectment proceedings in Maryland’s landlord/tenant court do not apply, and the foreclosure purchaser must go through a different and potentially longer court process to get possession of the property. To get a head-start on the court process, some foreclosure purchasers would start the eviction process before expiration of the ninety (90) day notice. The Maryland Court of Appeals holding* made it crystal clear that the head-start filings are unlawful in Maryland and purchasers must wait until expiration of the ninety (90) day notice to commence a legal action. Furthermore, the notice cannot be given until the deed is transferred to the foreclosure purchaser.
So, what does this mean for foreclosure purchasers?
First, any plans to live at the property or flip the property should take into consideration the fact that the tenant might not leave when asked and the fact that it could take weeks or months after expiration of the ninety (90) day notice to gain possession of the property.
Next, as a preemptive measure, as soon as possible, the tenant should be given clear and concise notice of the intent to evict.
Finally, foreclosure purchasers must comply with all statutory requirements for notices to tenants, including requirements for content, timing, and delivery. Failure to abide by such requirements may result in more delay.
*Curtis v. US Bank National Association, No. 96, September Term, 2011. RecordFax No. 12-0820-22, 18 pages
LaVonne O. Torrence is a real estate attorney with Torrence Law Office, LLC. Her practice focuses primarily on leasing transactions and extends to delivering solution oriented counsel and representation in connection with regulatory and operational issues as well as landlord/tenant disputes. She can be reached at: 301-825-5655. For more information, visit: www.torrencelegal.com and www.marylandevictionlawyer.com.