How to Evict Tenants After Foreclosure

In Arizona Landlord and Tenant law, does it make a difference if a lease was month-to-month or that the lease was a one-year lease with seven months remaining on the lease? An investment group purchased a home in Gilbert, Arizona at a bank foreclosure sale. The home was in very poor condition, and the plan was to “flip” the home to another buyer for a profit after there were $20,000 worth of improvements and repairs made to the home. There was a tenant in this home, but the bank’s agent said that the tenant was only in the home on a verbal month-to-month lease. However, when the tenant was furnished with a five-day notice to move out, the tenant showed a one-year lease signed by the former owner of the home and the lease still had seven months remaining. The investment group went back to the bank’s agent with a copy of the one-year lease and the bank’s agent said that the tenant had forged the signature of the original homeowner on the one-year lease, and that there is only a verbal month-to-month lease. What is the best way to get this tenant out of the home?

Prior to May, 2009, the purchaser of a home at a bank foreclosure sale was entitled under Arizona law to furnish five days’ notice to the tenant, and thereafter begin eviction proceedings. Under the new federal law enacted in May, 2009, however, tenants under a bona fide lease with the former owner of the home generally have the right to stay in the home after foreclosure for the remaining months of the lease. Therefore, if there is a bona fide one-year lease with seven months remaining, the tenant after the foreclosure sale is entitled to stay in the home for the remaining seven months, provided that the tenant now makes the rental payments to you as the new landlord. If there is no bona fide one-year lease, the tenant by Arizona law is only a month-to-month tenant. The new federal law requires ninety days’ notice after foreclosure to terminate a month-to-month tenant. Therefore, based on the fact that the one-year lease may be a forgery, the investment group should furnish ninety days’ notice now and begin eviction proceedings after ninety days. If the tenant can successfully contest these eviction proceedings on the ground that the one-year lease is not a forgery, the tenant will be entitled to stay in the home for the remaining months of the one-year lease.

Combs Law Group was organized as and continues to be a highly specialized, boutique real estate law firm. For more information please contact us at info@combslawgroup.com or by calling 602.957.9810.

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