Source: https://browardlandlord.wordpress.com/category/landlord-tenant/foreclosure-landlord-tenant/
Timestamp: 2019-04-19 09:24:32+00:00

Document:
Attorney Charles D. Franken of Plantation Florida wins this week’s brass balls award. Attorney Franken, was defending a month to month tenant in a eviction for non-payment of rent. The property had then gone into foreclosure. The tenant’s defense to non-payment of rent: that the foreclosure deprived the tenant of his peaceable enjoyment of the property thus constituting a “constructive eviction and entitling the tenant to a judgment against the landlord for three months rent.
The court ruled that a “constructive eviction” arises in Florida when “an act, although not amounting to an actual eviction, is done with the express or implied intention, and has the effect of essentially interfering with the tenant’s beneficial enjoyment of the leased premises.” Hankins v. Smith, 103 Fla. 892, 895, 138 So. 494, 495 (1931); Berwick Corp. v. Kleimginna Investment Corp., 143 So.2d 684, 687 (Fla. 3d DCA 1962). However, merely being a tenant in a property being foreclosed does not on its own result in a finding that a constructive eviction has occurred. See Carter v. Gilbert, 99 Fla. 1056, 1058, 128 So. 250, 251 (1930); Paine v. Kemp, 77 Fla. 531, 532, 82 So. 53, 53 (1919) (distinguishing foreclosure and constructive eviction). On the other hand, when utilities and other services had been discontinued while a property was in foreclosure, the tenants had grounds to claim a constructive eviction had occurred. Sens v. Slavia, Inc., 304 So.2d 438, 440 (Fla. 1974).
In the instant case, the tenant was a month-to-month tenant. The foreclosure action did not render the property uninhabitable or untenantable. See Benson v. Albert’s Carpet of Tequesta, Inc., 15 Fla. L. Weekly Supp. 1121a (15th Cir. Ct. 2008). The Defendant was not forced out of the premises — indeed, he is still in possession some seven months after the foreclosure action was filed. Moreover, the tenant’s month-to-month tenancy was not affected at all, and his “beneficial enjoyment” of the property has not been interfered with. His obligation to pay rent has not been excused.
The homeowners association filed a foreclosure for unpaid assessments on 2-11-10. A tenant, Jannelle Forbes, was personally served with the foreclosure summons and complaint on 2-27-10. The court granted a summary judgment of foreclosure on 9-16-10. On 10-13-10, a Sherry Rose executed a new lease with the unit owner. On 10-21-10, the property was sold at foreclosure auction to the plaintiff homeowners association. The association received a certificate of title 11-2-10. On 11-12-10, the association served the new tenant, Sherry Rose with a 90 day notice to vacate pursuant to the Protecting Tenants at Foreclosure Act of 2009. Nevertheless, the association filed for a writ of possession on 12-21-10. The tenant filed for a stay of the writ on 12-23-10, which was granted.
The court ruled that an association lien foreclosure does fall under the Protecting Tenants at Foreclosure Act of 2009. But the act only protects leases which are an “arms-length” transaction and in which the “The receipt of rent is required by the lease or tenancy in amounts not substantially less than fair market value.” The lease provided for rent of $1,000 a month “to be used for the repair to the property.” The court made a finding that as the “rent” was to be used for repairs and not paid to the landlord, it failed the test of “receipt of rent” under the Act. Further, as there was no evidence that the tenants had paid any money to move in to the property, the court found that it was not an arm’s length transaction. Thus, the court declared that Sherry Rose was not entitled to the protections of the Protecting Tenants at Foreclosure Act of 2009, and the stay of the writ of possession was lifted.
I have been getting a lot of questions from tenants whose landlord is in foreclosure what their legal status is. First you should check the status of the foreclosure on the Clerk of Court’s website. In Broward that is http://www.clerk-17th-flcourts.org/ClerkWebsite/welcome2.aspx.
to see the status. You can also try calling the Clerk at 954-831-5745. Foreclosures generally only have one five minute court hearing called the ” Summary judgment .” This is where the bank claims that the borrower has raised no defenses and the judge should grant the foreclosure automatically. When this happens, the Clerk of Court sets an auction date – generally six to eight weeks later. After the auction check again to see if the sale went through or was cancelled. If the sale went through and the bank was the high bidder (usually the case) Federal law requires the bank to give the tenant a written 90 day notice to vacate. If the tenant had a lease that pre-dated the foreclosure, the bank has to let you live out your lease.
Because there are so many foreclosures the banks frequently cancel the sale because they do not actually want to come into title on the property yet. Especially if it is a condo and they would have to start paying the assessments as the new owner. The judges seem to be willing to let these foreclosures languish in the court system with no activity for years. So if you are a tenant, a mortgage foreclosure should not be something that takes you by surprise, much less actually interferes with your lease.
A bigger concern to tenant is the landlord’s non-payment of condo assessments for two reasons: First, that the association can be very aggressive about foreclosing on the unpaid dues. They move much faster than the mortgage companies and can finish their foreclosure within six months. When the foreclosure is granted your lease is terminated too. They probably would like to keep you, but you will have to renegotiate. The second risk is that the condo association can move to seize your rent. In effect pushing your landlord aside and taking over. Then the landlord is no longer entitled to evict you for non-payment. Unfortunately for the tenant, the association as landlord has no duties to maintain the property, so you may not be happy about this change in landlords. But at least you no longer have to worry that the dues aren’t being paid.
The filing of foreclosures does not eliminate your obligation to pay rent to the landlord until the foreclosure sale takes place or your get the notice of rent seizure from the condo association. You may be willing to gamble that the landlord will not pay the fees to evict you for non-payment. That is your call.
The Defendant is a month-to-month tenant in property owned by the Plaintiff. The property went into foreclosure. The tenant stopped paying his rent. The tenant claims that he has been subject to constructive eviction due to the foreclosure action.
As pointed out by the tenant, a “constructive eviction” arises in Florida when “an act, although not amounting to an actual eviction, is done with the express or implied intention, and has the effect of essentially interfering with the tenant’s beneficial enjoyment of the leased premises.” Hankins v. Smith, 103 Fla. 892, 895, 138 So. 494, 495 (1931); Berwick Corp. v. Kleimginna Investment Corp., 143 So.2d 684, 687 (Fla. 3d DCA 1962). However, merely being a tenant in a property being foreclosed does not on its own result in a finding that a constructive eviction has occurred.See Carter v. Gilbert, 99 Fla. 1056, 1058, 128 So. 250, 251 (1930); Paine v. Kemp, 77 Fla. 531, 532, 82 So. 53, 53 (1919) (distinguishing foreclosure and constructive eviction). On the other hand, when utilities and other services had been discontinued while a property was in foreclosure, the tenants had grounds to claim a constructive eviction had occurred. Sens v. Slavia, Inc., 304 So.2d 438, 440 (Fla. 1974).
In the instant case, the tenant was a month-to-month tenant. The foreclosure action did not render the property uninhabitable or untenantable. See Benson v. Albert’s Carpet of Tequesta, Inc., 15 Fla. L. Weekly Supp. 1121 (15th Cir. Ct. 2008). The Defendant was not forced out of the premises — indeed, he is still in possession some seven months after the foreclosure action was filed. Moreover, the tenant’s month-to-month tenancy was not affected at all, and his “beneficial enjoyment” of the property has not been interfered with. His obligation to pay rent has not been excused. Accordingly, it is hereby ORDERED AND ADJUDGED that Plaintiff is hereby granted judgment for eviction of Defendant and for possession of the premises.

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