Eviction After Foreclosure – Some Help From The Courts


15 June, 2013


Mortgage Lender and Servicer Alerts

Eviction after foreclosure really is laden with problems and issues.  When the lender or servicer is constrained to take back a property and holdovers remain in possession (some protected by statute of course) there is a need to evict.  While the minutia of this is left to counsel, when the evictions seem to be taking too long — as perhaps too often does occur – then some of the details about why this happens may become meaningful.  Regarding two troublesome aspects, a new case happily offers both help and clarification. [Hudson City Sav. Bank v. Lorenz, 959 N.Y.S.2d 844 (Dist. Ct. 2013)].

To set the stage, note first that there are two statutes in New York authorizing eviction after foreclosure and the new owner, the foreclosure sale purchaser, can avail itself of either one.  (Just for informational purposes, these are RPAPL §713(5) and RPAPL §221.)

The steps needed to effectuate either method are both considerable and technical with the difficulty of pursuit exacerbated by court confusion between the two sets of requirements. That is to say, the new owner of the foreclosed property could be proceeding under one section with the court demanding obligations imposed only by the other section.  That aside, although it is meaningful, we focus here on the two issues addressed in the new mentioned case.

While most often the people to evict did actually reside at the foreclosed premises, sometimes they will be elsewhere but have not made known their departure and indeed, some of their belongings may still be at the premises.  If the person to be evicted (against whom legal possession is to be obtained) resides elsewhere, but does not tell the new owner, how can they be served?  The new case explains that these parties need not be served at whatever their new address is (or at their place of employment).  Rather, they can be served at the foreclosed premises.  This is certainly helpful when this situation is encountered.

Of greater importance, though, is a very thorny issue about how to make known to the holdovers that the new owner of the property has actually been deeded that property.  Without exploring all the intricate details, assume that what is legally required as a prerequisite to eviction is “exhibition” to the holdovers of the deed into the new owner.

Here in a nutshell is the problem.  Some cases have said that “exhibition” means more than merely annexing the deed to the legal papers being served (the notice of petition).  It means, some of these cases say, that the deed must actually be personally shown to the people holding over.  Well, if that is truly the requirement, then all a holdover has to do is avoid personal in hand service and then he can’t be evicted! They can remain in the house and not come to the door or never be around when the process server calls.  Service of the eviction papers themselves can certainly be made even if the holdovers are hiding in this fashion, because they can be given to a person of suitable age and discretion or they can be affixed to the door and mailed or, placed under the door and mailed.  That won’t do any good, however, if the deed actually has to be put into the face of the holdovers.

We have pointed out this dilemma in the past and the new case, pleasingly citing our treatise, agrees that having to display the deed to a holdover makes no sense and is simply not required.

Not every person needing eviction raises this defense, but for those who do, there is now better authority confirming that annexation of the deed to the petition is sufficient.

Mr. Bergman, author of the four-volume treatise, Bergman on New York Mortgage Foreclosures, LexisNexis Matthew Bender (rev. 2017), 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.