Last month, a Los Angeles Superior Court judge ruled that a mortgage company cannot evict a tenant in a home that had been foreclosed. As the new owner the mortgage company failed to give the tenant a 90-day notice to pay rent or move out under a federal law. As a result the judge granted the tenant’s motion throw the case out of court.
Under a three year old federal law, a new owner must give the tenant in a foreclosed home a 90-day notice to pay rent or move out before filing an unlawful detainer or eviction action. In this case, the tenant stopped paying her rent on the home where she was living. The landlord mortgage company, which had obtained the home from foreclosure, gave the tenant a 3-Day Pay Rent or Quit notice which is usually sufficient under state law. The tenant did not pay the rent within three days, and the mortgage company filed an unlawful detainer.
The tenant then filed a motion to throw the case out of court, also known as a motion to quash. The issue became whether the mortgage company had the power to step into the shoes of the landlord and issue a 3-day notice. The tenant argued that federal law controlled in this situation. The judge agreed with the tenant and issued a written ruling. The judge stated federal law which mandates a 90-day notice to pay rent or quit must be given. The judge also noted that after giving the 90-day notice to the tenant for nonpayment, the mortgage company would then have the option of filing an eviction action. This judge’s decision might signal a turn in the power of a mortgage company stepping into a landlord’s shoes.