If you’re a real estate investor looking for bigger margins, buying a foreclosed property might be a good option for you. However, if that foreclosed property is still occupied, whether it be by tenants or the previous homeowner, there are some special considerations you must take once the purchase is complete. Understanding New York’s laws about evictions after a foreclosure is a must for anyone who wants to explore this method of real estate acquisition. In this post, we’ll talk about the process of evicting tenants or previous homeowners after a foreclosure and where to go to get the best legal assistance with evictions in The Empire State.
The Process Begins With Communication
While you will sometimes have occupants who flatly refuse to leave, regardless of legality, more often than not the occupants are okay with moving. They simply need enough time and notice to find somewhere else to go. Communicate with the occupants about their plans and struggles in moving. The eviction process can be costly, so making small concessions in the form of a rent waiver or relocation assistance may end up costing you less than moving forward with an eviction. Considering the human factor of housing and relocation will often lead to better fortune down the road.
Serve the Proper Notices
Once you receive the deed for your new foreclosed property, the first task you must take on is dealing with any lingering occupants. According to New York state law, you must formally serve very specific notices to anyone occupying the property, giving them time to make other accommodations. However, the type of notice you serve will depend on whether the occupant is a bona fide tenant or the previous homeowner:
- Ten-Day Notice to Quit: If the current occupants are the previous homeowners or a non-bona fide tenant (i.e. they don’t have a current written or oral lease or rental agreement), then you must serve each occupant with a ten-day notice to quit. This notice informs the occupants that they have ten days to vacate the property. Also provide a copy of the certified deed showing that you are the new legal owner of the property. If the occupants do not leave after the required ten days, you may begin eviction proceedings against them.
- Ninety-Day Notice for Bona Fide Tenants: If the occupants of the property are tenants with a current written or oral lease or rental agreement, and are current on their rental payments, you must give them a ninety-day notice. This gives the occupants a full 90 days or to the end of their written lease, whichever is greater, to vacate the property, which should be enough for them to find other safe and reasonable housing. If they do not vacate after 90 days, you may begin eviction proceedings against them.
If you do not serve the occupants with the proper notice, you will not be able to initiate eviction proceedings in a timely fashion. If you have any questions about how to properly serve occupants with these notices, consult with a qualified New York attorney with experience in foreclosures and evictions.
Understanding Holdover Actions
So what happens if the occupants do not vacate your property after being served the proper notice? You’ll need to file a holdover action with the local court. The holdover action gives you, the new owner, the right to evict the occupants who have not left the property after their ten or ninety-day notice has expired.
One of the most important things to keep in mind with a holdover action is that an occupant can contest it by filing a motion or order to show cause. This basically means they are claiming they were not served with the proper initial notice. We cannot stress enough that you need to use a professional process server when serving the initial 10 or 90-day notice, since they will provide proof of the proper service, which you can then provide to the court in response to the occupant’s motion.
Along with the evidence (usually a signed affidavit, although some process servers now provide bodycam or GPS evidence as well) from the process server, you will also need to provide the court with a copy of the notice that was served to the occupants and a copy of the property deed showing that you are the legal owner. If you cannot produce all of this evidence in response to the occupant’s motion, the court may dismiss your holdover action, requiring you to start the process over again.
Occupants Who Don’t Show Up for Court
Let’s say you’ve filed your holdover action and the court has set a date to hear your case, but the occupants don’t show up. That’s great for you! This usually means that the judge will issue a default judgment in your favor and allow you to obtain a warrant of eviction for the remaining occupants. Once you have the warrant of eviction, you can request that law enforcement physically remove the occupants and their belongings from your property.
The Type of Tenant Matters
Not all tenants are treated the same in the foreclosure-eviction process in New York. It’s important to know the different regulations involving certain types of tenants, particularly tenants who are considered rent-controlled or rent-stabilized, or tenants who receive housing assistance through the Section 8 program. These types of tenants have special protections that prevent you from ending their current lease. They typically have strong protection against eviction except in extreme cases of serious lease violations. The only exception is if you intend to occupy one of the units in a multi-unit property yourself, in which case you would only be allowed to serve the occupants of that one unit with a 90-day notice to vacate.
Taking the Next Steps as a New Property Owner
Depending on your intentions as the new property owner, you’ll deal with the existing occupants accordingly. If you simply intend to flip/sell the property, you may choose to leave the occupancy issues to the future owner, or you may decide to handle the evictions yourself and list the property at a higher price. If you intend to occupy the property yourself or want to lease to new tenants, then you’ll have no choice but to deal with the occupants as quickly as possible. As a recap, the process involves:
- Consult an Attorney: Having someone on your side who is familiar with New York law will make the eviction process after a foreclosure much smoother.
- Communicate with the Occupants: Often the occupants of a foreclosed property are fine with moving, they just need enough time and proper notice. If they haven’t left due to the financial strain of moving, you may want to consider offering relocation assistance to help them out. This may end up costing you less than having to proceed with the eviction process.
- Serve the Required Notices: Make sure the occupants receive the proper type of notice, via a licensed process server, depending on if they are the previous homeowner, a bona fide tenant, or a non-regulated tenant. Skip this step and you risk delaying the entire eviction process.
New York’s Premier Attorney Firm for Foreclosures & Evictions
Purchasing a foreclosed property can be both a rewarding and risky endeavor. Having great legal counsel on your side is essential to streamline the process and help you manage your holdings more effectively. When you need legal assistance handling evictions after a foreclosure sale in New York, you need to make one call – to Roach & Lin, P.C. in Syosset, Long Island, NY. We have the experience and determination to handle all evictions in a timely and efficient manner. Call us at 516-938-3100, email info@roachlin.com, or send us a message online to get started today.