Foreclosure Evictions / Unlawful Detainers
By Matt Dickstein
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.
me to schedule a legal consultation: