Foreclosure Evictions / Unlawful Detainers

This article gives you a short outline on how to evict an occupant from a property that you just bought in foreclosure.  Usually the properties you buy in foreclosure are occupied.  You must get rid of the occupant ASAP to protect the property and maximize your profit. 

Below are the steps for evicting occupants after foreclosure.  In general, you remove occupants either through cash-for-keys or an eviction / unlawful detainer proceeding.  Use a lawyer in either case – buying foreclosures is a business not a hobby.  Foreclosures are not a game for amateurs.  

** Author’s notes: First, I write this article not just as a lawyer but as a business owner.  I and a partner operate a fund that buys foreclosure properties.  We do foreclosure evictions as an integral part of our business model.  Second, if you are interested in evictions in general, see my article Evictions & Unlawful Detainers.**

Step #1 – Trustee’s Deed.  Record your trustee’s deed ASAP.  You’ll need the recorded deed for later steps.

Step #2 – Homeowner or Tenant?  Find out if the occupant is the former homeowner or a renter.  Pray he’s the former.  New federal and California laws give substantial protections to tenants in foreclosed properties.

Step #3 – Cash-for-Keys.  Offer cash-for-keys, that is, offer to pay the occupant to leave.  It makes economic sense to spend a few thousand dollars to get rid of the occupant.  Cash-for-keys can save you time and legal expenses.  Be sure to use a written contract to document the cash-for-keys agreement.

How much do you pay the occupant?  There is no cash-for-keys “market rate” – it’s a case by case negotiation.  Aggressive occupants demand more money because they think they can play the system.  Also, occupants seem to demand more money in cities with rent control laws. 

Step #4 – Eviction.  Start eviction proceedings simultaneously with the cash-for-keys offer.  This lets the occupant know that if he gives you problems, he might get nothing from it except a legal bill.

Step #5 – Get a Lawyer for the Eviction / Unlawful Detainer Case.  Don’t do it yourself.  Why?  First, unlawful detainer law is very complex.  Further, the laws for foreclosure evictions are a little different than for ordinary evictions.  You must know all applicable laws.

Second, it’s easy to foul up an unlawful detainer case, including the notice period, complaint, service of process plus a host of other requirements.  For example, it’s hard to keep track of the various notice periods and response periods that apply to different types of occupants under different circumstances.  Pre-complaint notice periods range from 3 days to 30 to 60 to 90 to something else.  After you file the complaint, occupants then have various deadlines for filing a response depending on how you made service.  Also factor in the separately running response time for a Prejudgment Claim of Right to Possession.

Third, in unlawful detainer cases, courts will not cut you any slack.  The court will make you start over at the beginning for each mistake.  You need to do the job right the first time.

Step #6 – Timing.  Eviction cases take a minimum of 1 ½ months to finish, from pre-complaint notice to sheriff lockout of the occupant.  The minimum time applies if the occupant does not answer the complaint and you take a simple default.  If your occupant raises defenses or files in bankruptcy, however, the eviction will take many more months and cost a few thousand dollars more.  It gets worse if you are dealing with a tenant.  As I mentioned above, tenants enjoy substantial protections under the law.

That’s it for my short outline on foreclosure evictions.  Please know that this is just an overview designed to let you see the forest for the trees.  To explore all details would require a multi-volume treatise.  Evictions can be tricky and there’s a lot of law out there.  If you do nothing else, get a lawyer to help you.  Good luck.

Call me to schedule a legal consultation: 510-796-9144