This is a rather florid title for a hidden but critical peril in the process of eviction after foreclosure – now apparently solved by a new case greatly benefiting any purchaser at a foreclosure sale. [See Plotch v. Moundrakis, 2018 N.Y. Misc. LEXIS 1375 (App. Term 2d, 11th & 13th Judicial Dists.)]
Whether the foreclosure sale purchaser is a third party or the foreclosing plaintiff, it is not uncommon for the borrower (former owner) or his tenant, and/or another tenant (if a two family house for example) to holdover. Of the two methods to pursue possession, the one in a landlord-tenant court (pursuant to RPAPL §713) requires by statute that a prerequisite is not only service of a ten-day notice to quit, but “exhibition” of the referee’s deed to the holdovers as well.
What does exhibit mean? Most courts held that it meant actually displaying the deed to the person’s eyes – literally greeting the person, holding up the deed and saying “here it is”. And if the person was in hiding, or refused to come to the door (easy enough), what then? Well, avoiding service would then be fatal to obtaining possession. Making one’s self unavailable provided ultimate protection against eviction – and so it was in many cases; truly bizarre.
Particularly ironic: service of process, even in an eviction case, is valid if made upon a person of suitable age and discretion, or by nail and mail. But if the deed had to be “exhibited” as interpreted, then the standard for the deed was greater than for process itself. While this made no sense, it was the prevailing (although not exclusive or uniform) interpretation.
Along comes the mentioned new ruling. The landlord-tenant court had dismissed the case because occupants were served by nail and mail, concluding therefore that the deed had not been exhibited. On appeal, though, the court examined the history of the statute with care (no one previously had done so) and reversed. As part of that, it held definitively that service of a certified copy of the deed by means other than personal delivery, such as to a person of suitable age or by nail and mail, will satisfy the exhibition requirement.
The game changes substantially.
Mr. Bergman, author of the four-volume treatise, Bergman on New York Mortgage Foreclosures, LexisNexis Matthew Bender (rev. 2018), is a partner with Berkman, Henoch, Peterson, Peddy & Fenchel, P.C. in Garden City, New York. He is also a member of the USFN, The American College of Real Estate Lawyers, The American College of Mortgage Attorneys, an adviser to the New York Times on foreclosure issues and writes a regular servicing column for the New York Law Journal. He is AV rated by Martindale-Hubbell, his biography appears in Who’s Who In American Law and he has been for years listed in Best Lawyers In America and New York Super Lawyers.