Good News For Eviction After Foreclosure


1 July, 2006


Mortgage Lender and Servicer Alerts

New York has an unduly confusing alternate set of procedures for eviction after foreclosure which leads to delay and sometimes denial of eviction – particularly irksome for lenders and servicers who suffer lengthy judicial foreclosure only to incur further delay as mortgagors and their tenants manipulate the system.  A new case finally sets the record straight on a vital point (and may we observe liberally quotes one of our articles on the very point): GRP/AGREO 2004-1, LLC v. Friedman, 8 Misc. 2d 317, 792 N.Y.S.2d 819 (Just. Ct. 2005).

Here is the problem, the confusion and the favorable result.  If proceeding in landlord tenant court to evict after foreclosure (which can be a faster method) the special statute says the deed into the foreclosure sale purchaser (which could be the lender) must be shown to the holdovers.  What does “shown” mean?  Some case law discussion says this means to actually hold up and exhibit the deed in the face of those freely languishing at the foreclosed premises.  Can we assume that the holdovers will be waiting at the property anxious to greet the process server to peruse the deed?  Of course we know the answer.

At the same time, the holdover must be served with a notice to quit.  But service of that can be by in-hand delivery, or by giving to a person of suitable age, or by affixing to the door and mailing.  If service of the notice is valid by any of those methods, but the deed must be “shown”, any holdover who wanted to remain forever would simply never come to the door.  And yet, there is that authority which says in essence that “delivering” the deed requires a higher standard than any service of process.

This unworkable incongruity needed a court to recognize it and reject it.  That is precisely what the new case did.  In a nutshell, annexing the deed to the notice to quit suffices.  This is the right decision.  Unfortunately, it comes from a justice court – a low level trial court – so whether it will be followed by other courts is an unknown.  Articulating the wisdom, though, is helpful to any foreclosure sale purchaser, lenders and servicers included.

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.