Chapter 10-3 Tenants

10-3 Tenants

10-3:1 Tenancies Established Prior to Foreclosure

Parties in possession of the subject property, whether under a written or oral lease, are necessary parties to the foreclosure action.⁴⁸ While a tenant is a necessary party, no case explicitly holds that a tenant is an indispensable party. Instead, a tenant which has not been joined as a party to the foreclosure action simply continues to hold its possessory interest until its rights are adjudicated.⁴⁹

A foreclosure action in which the tenant has been properly joined as a party terminates the tenant's possessory interest in the lease.⁵⁰ This result is based on the principle that the tenant's leasehold is extinguished simultaneously with his landlord's title, from whence it was derived.⁵¹ The purchaser at sale thereafter does not step into a landlord-tenant relationship with the tenant.⁵² Rather, the relationship at that point is owner and trespasser—the exact situation for which a writ of possession is required.

After the foreclosure sale, the Federal Protecting Tenants at Foreclosure Act (FPTFA)⁵³ and the Florida Residential Landlord and Tenant Act (Florida Act)⁵⁴ entitle tenants to notice and time to vacate the foreclosed property, and potentially the honoring of their existing lease. The FPTFA does not preempt the Florida Act where the Florida Act is more protective of tenants, but the FPTFA does preempt the Florida Act where it is less protective.⁵⁵ The FPTFA and Florida Act are consistent with regard to the class of tenants they protect.⁵⁶ However, unlike the Florida Act,⁵⁷ under the FPTFA a bona fide lease with a specific duration must be honored by the purchaser at the foreclosure sale for the lease's duration under its terms.⁵⁸ In addition, under the FPTFA, a bona fide tenant without a written lease or with a "lease terminable at will under State law" must be given 90 days to vacate after notice.⁵⁹ Under both acts, the tenant must pay rent to the purchaser.⁶⁰

Neither of the acts and related rights apply to a holdover tenant who was the mortgagor of the property in the subject foreclosure, nor do the acts apply when the lease was not the result of an arms-length transaction.⁶¹ The purchaser does not assume other various statutory obligations of a landlord for building maintenance and post-tenancy security deposit notices.⁶² However, the purchaser is strictly prohibited from terminating utility services furnished to the tenant, preventing reasonable access to the property, and changing locks or removing personal property, and the purchaser may be liable for damages and attorney's fees in the event a violation occurs.⁶³

10-3:2 Lessee Pendente Lite

A tenant taking possession mid-foreclosure is a lessee pendente lite.⁶⁴ A lessee pendente lite will be bound by the judgment in the action to which his landlord is a party.⁶⁵ Like a purchaser, a lessee pendente lite is not entitled to intervene or otherwise be made a party to the ongoing lawsuit.⁶⁶

Lessee pendente lites' only rights in the pending foreclosure case derive from the Federal Protecting Tenants at Foreclosure Act and the Florida Residential Landlord and Tenant Act, discussed in Section 10-3:1.

10-3:3 Writ of Possession

Following a final judgment of foreclosure where the tenant is joined as a party, the purchaser at foreclosure sale may obtain relief from the tenant's continued possession by...