I have gotten a few questions this month about the post-sale eviction timeline and how long a homeowner can remain in the property after the sale. The uncomfortable answer is that there isn’t really an answer. There are no deadlines or dates by which a foreclosure purchaser (defined below) must proceed with the eviction process. It also depends on who purchases at the auction. Eviction is a legal process…this means that the purchaser MUST provide you with a 30-day notice to vacate, file a Complaint for Possession of Real Property in Landlord Tenant Court, appear in court, and get a Judgment of Possession. Until all of those steps occur, the purchaser does not have any legal authority to evict you from the property OR to enter your property for any reason. Once the case is filed, you can access the eviction case online at the DC Courts website.
Let’s clarify the basics…
In the foreclosure case, once the judge grants Plaintiff’s motion for judgment and enters written judgment in favor of Plaintiff, it means that Plaintiff is legally authorized to select a sale date and start advertising the sale (once per week for 4 consecutive weeks). You, as a homeowner, will receive a Notice of Sale by regular and certified mail between 10-30 days before the sale date. You can contact your servicer in order to confirm if a sale date has been scheduled in the interim.
Don’t wait for the status hearing to ask for more time….
Once judgment is entered, the judge does not have the authority or ability to make any decision about the foreclosure sale or eviction regardless of whether a status hearing happens after judgment is entered.The judge does not have the ability to stop or otherwise interfere with the sale after judgment is entered. The judge does not have anything at all to do with eviction, how long you can stay in the property or any offers of cash for keys/relocation expenses even though there will still be status hearings occurring in the foreclosure case. Plaintiff’s counsel will schedule the sale date based on the direction of the servicer so if you have a settlement pending, loss mitigation under review or short sale review pending, you need to be in almost daily contact with the servicer and Plaintiff’s counsel to confirm that they didn’t set the sale while you are awaiting the decision.
So long as the foreclosure case is open, the judge will schedule status hearings to ensure that the Plaintiff files its Motion to Ratify Sale and Motion to Ratify Accounting and Close Case. Those two (2) post-sale motions are the only remaining items that the judge deals with after judgment has been entered.
This is where the process gets a little confusing for most…
The foreclosure sale is a public auction. The Plaintiff (via trustee or agent) makes the opening bid based on the total amount of money owed to it per the Note. If a third party (individual, company, investor, etc.) is present and makes a higher bid, the third party wins the bid and becomes the third-party purchaser (“TPP”) of the auction. The TPP leaves the auction with a Memorandum of Sale noting the final bid price that must be paid within 60 days of settlement. If no third party makes a higher bid than Plaintiff’s opening bid, Plaintiff wins the bid by default. We refer to this as a lender buyback. Either way, you no longer own the property after the foreclosure sale occurs (even though there will still be a deed reflecting that you are the most recent record owner).
How fast the eviction process commences depends mostly on whether the TPP or the Plaintiff wins the bid. In my experience, if the Plaintiff wins the bid, they usually continue to finish the foreclosure case before proceeding with the eviction case. In my experience, if the TPP wins the bid, they tend to move a lot faster (NOTE: this does not mean that the TPP has to or will move faster…just that they normally do). In DC, the Memorandum of Sale given at the auction is sufficient to provide the TPP with standing to file an eviction case in the Landlord Tenant Court and obtain a Judgment of Possession against you. The TPP does not have to go to closing and get title to the property in order to evict you.
The most important takeaway is that there are no surprises in this process. You can find out who purchased your property at the auction once the Motion to Ratify Sale is filed. You will be served with the 30-day notice to vacate letter by the purchaser/TPP. If you choose not to leave (which you can absolutely do), the purchaser/TPP must file a Complaint in Landlord Tenant Court and serve you with a copy of the Summons and Complaint. The Summons will contain the initial hearing date for the eviction case. NOTE: All hearings are still virtual in Landlord Tenant Court so keep an eye out for the WebEx login instructions. When you appear in court, you can discuss the case with the purchaser’s counsel to see if they will offer a vacate agreement (a firm move-out date and relocation expense funds). If no agreement, the judge will usually enter judgment in favor of the purchaser/TPP. After the Judgment of Possession is entered, the purchaser/TPP has up to ninety (90) days to file the Writ of Restitution. The Writ of Restitution is what authorizes the Marshal to execute the eviction (which can happen as soon as three (3) days after the Writ is issued). The Writ is good for 75 days.
COVID changes the rules slightly so homeowners are no longer in danger of having their belongings placed outside the property during the eviction BUT there is a seven (7) day window after the eviction in which the homeowner has to contact the purchaser/TPP and let them know when he/she intends to retrieve belongings still inside the home. The locks are changed during eviction so contacting the purchaser/TPP is the only way for the homeowner to access the property. After the seven (7) day period expires, the belongings inside the home are deemed abandoned so the purchaser/TPP can choose how to dispose of the belongings.
Feel free to schedule a phone consult with me!