What kind of rights does a tenant have if property is voluntarily surrendered due to Ch. 7?

Question

The automatic stay was lifted which gave lender right to protect property. Tenant was notified on June 11 and the lender is requesting property be vacated by July 25. Tenant was not given an exact date when I talked to her on June 11 b/c I did not have one but she knew of the mobile home going back. Will an eviction notice have to be filed or does lender have rights to seize property at will?

Answer 1

A formal eviction would be needed, and whether it can even be obtained depends on the details of the lease. If the tenant has a lease for a particular term, and is in compliance with its terms (especially paying the rent), the rights of the property owner (including one acquiring title by foreclosure) are subordinate to the lease. But if the tenancy is month to month, an owner (including an owner acquiring title by sale or foreclosure) can terminate the tenancy on a month's notice. If the owner has a right to terminate the lease, it is important to vacate without a formal eviction being filed; an eviction on one's record is murder when it comes to attempting to rent something else.

Answer 2

Unless the lease was transferred to the new owners of the property in the sale, the tenant is now a month-to-month tenant for the new owner, and is to be treated under state statutes regarding such tenancies. Sad to say, written leases do NOT automatically transfer to new ownership unless specifically stated in the contract to purchase, which in this case isn't really sale, but a forfeiture.

The tenant still has a valid lease contract, but its validity is with the former owner who cannot now perform according to the lease because he no longer owns the property. The tenant can sue the former owner for breach of contract, but obviously won't get very far when the former owner is in bankruptcy.

Answer 3

You will need to start eviction proceedings. However, I would make clear to the tenant it would be easier and cheaper for everyone if she was out by 7/25. It might even be cheaper to give her a small incentive, say a couple of hundred just to get her the hell out...an eviction could take months.